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How to Account for Inflation While Planning for Retirement?

 
 

Inflation is one of the biggest factors influencing retirement planning. Factoring in inflation over the years, one can arrive at the corpus amount that will be needed at the time of retirement. Here are 4 tips to making an inflation-proof retirement plan:

Begin Early and Invest Wisely

When it comes to goal-specific investments, the sooner you start the better. For example, if you starts saving Rs. 9700 a month at 25 years of age, you can build a corpus of Rs. 5.3 crore at (@12% return) when you retire at 60. However, if you delay the investment by just 5 years, you would have to invest Rs. 17,400 every month to build the same retirement fund.

At a young age, people are willing to take more risks with their investments. Hence, you can consider riskier investment ideas equity and get the opportunity to reap higher returns.

Choose the Correct Pension Plan

While choosing your pension scheme it is important to ascertain how much risk can you take and where to invest depending on the time left before you retire. You can choose between traditional pension plans or Unit Linked Pension Plans like Max Life Forever Young Pension Plan, which gives a lifetime income to you and your partner.

Keep the Retirement Fund Separate

To build a sufficient retirement corpus, ensure that the amount invested in the pension policy remains untouched. Your retirement fund should be sacred and not liquidated for any other requirement. Remember, even small withdrawals can significantly diminish the retirement corpus.

Move to Safer Avenues as You Near Retirement

As you get closer to retirement, systematically reduce your exposure to riskier and volatile investments. Start booking profits and safeguard your corpus. Underperforming assets can be slowly removed from portfolio and the proceeds can be used to increase your retirement corpus.

Your retirement years are something you look forward to. Don’t let inflation curb your standard of living and hold you back. You can read more about the plan Online or Schedule a meeting from Max Life to determine how much you need to save for your retirement.

Unit Linked Insurance Products (ULIPs) are different from the traditional insurance products and are subject to the risk factors. The premium paid in the Unit Linked Life Insurance Policies is subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Max Life Insurance is only the name of the insurance company and Forever Young Pension Plan(UIN: 104L075V02)is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects or returns.For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. Past performance of the funds does not indicate the future performance of the funds. You may be entitled to certain applicable tax benefits on your premiums and policy benefits. Please note all the tax benefits are subject to tax laws prevailing at the time of payment of premium or receipt of benefits by you. Tax benefits are subject to changes in tax laws.

 
 
 

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