While most of us are mindful about the importance of retirement planning, only a few are able to give it the priority it deserves. Here are a few steps to help you make retirement planning a priority, while managing your daily expenses:
Step 1 – Accumulate
The first step towards making money is to save. Start by making it a priority. As you receive pay hikes or bonuses, increase your savings. Another way of savings is to minimize (ideally eliminate) debt. Credit card debts, EMIs, personal loans and other unsecured borrowings should be avoided as they charge a high interest rate.
Step 2 – Invest
Undertake a financial risk profiling exercise to ascertain your appetite for risk. For example, equities are a high risk, high return asset class and ideal for long-term investing but there might be a downside in the short term – are you comfortable with that?
As you grow older, shift towards low-risk debt funds. You can engage a financial advisor to identify the right mix of debt and equity to suit your risk profile and financial goals.
Moreover, you can get tax benefits for your investments. Choose from various tax-saving investment instruments like life insurance, pension schemes, EPF, small savings and FDs, NPS, etc. One such popular pension scheme is Max Life Forever Young Pension Plan.
Step 3 – Reap
At your retirement, it is time to enjoy the benefits of the years of disciplined investing and financial planning. Pension schemes allow you to buy an annuity using the saved amount and have a comfortable retirement.
A financial plan is incomplete without insurance. So before you start investing, ensure that you have enough health cover and life cover so that untoward incidents such as accidents, hospitalization, critical illness, untimely death etc., do not derail your retirement planning efforts or your family’s lifestyle.
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: 104L075V01)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.