banner

Retirement Planning

Know more about retirement planning to make a wise decision.

#Retirement 114 Views 87 Shares
banner
Rated by users

Retirement planning is an essential part of a sound financial plan, especially at a younger age. When you begin preparing for your future earlier, there is sufficient time to tackle any unprecedented challenges and live comfortably in the meantime. Many reasons add up to the importance of retirement planning in life.

First, let us understand what is retirement planning to have a better idea of the necessary steps to take.

What is Retirement Planning?

Retirement planning is a process of setting retirement income goals and taking all the possible actions and making decisions, which are essential to achieve those retirement goals. Retirement planning includes evaluating sources of income, estimating expenses, and setting up an investment plan or savings plan to achieve the retirement goals by managing the risks and assets.

When you start earning, retirement planning is not an immediate concern. It may be reasonably easy to put it off till a later time in life. Nonetheless, you must remember that it is always in your best interest to be prepared. There may be many life events that are out of control, but the least you can do is prepare for them in financial terms. The same is true for retirement planning.

Each of us has an idea of what our life will look like after retirement. No matter what it is, it requires ample financial support to maintain your standard of life. Retirement planning simply means setting income goals for post-retirement life and determining the steps necessary to achieve them.

A significant part of retirement planning is identifying income sources, evaluating expenses, investing in savings programs, and managing the risks.

To put it plainly, retirement planning means devising financial strategies that will help you save, spend, and invest according to your long-term goals in the later age. There are many financial instruments available that aid in retirement planning, depending on the individual’s profile.

Importance of Retirement Planning

When you have a steady income source, most problems in life become easier to solve. A financial burden can lead to several harmful consequences, including health issues that will only add to your worries.

When you have an adequate understanding of what is retirement planning and how it affects your life, you are better equipped to deal with post-retirement challenges.

While you can begin retirement planning at any point in life, it may be more convenient to do it early. Depending on when you start your retirement planning, your goals may also change. The pace of life today makes it challenging to pause and reflect on the long-term plans at the right time.

Also Read: Benefits of Early Retirement Planning.

While a comfortable life may have varying connotations for everyone, the importance of retirement planning remains the same. It is crucial to consider the factors particular to you and calculate the adequate amount for a joyful life after retirement.

Retirement Planning Calculator

While you can begin retirement planning at any point in life, it may be more convenient to do it early. Depending on when you start your retirement planning, your goals may also change. The pace of life today makes it challenging to pause and reflect on the long-term plans at the right time.

Also Read: Benefits of Early Retirement Planning.

While a comfortable life may have varying connotations for everyone, the importance of retirement planning remains the same. It is crucial to consider the factors particular to you and calculate the adequate amount for a joyful life after retirement.

                  Retirement Planning Calculator

Reasons to Plan for Your Retirement 

Financial security makes most things in life more convenient. Retirement planning provides that surety of being secure in monetary terms throughout life, regardless of employment. Let’s discuss the multitude of such reasons that make retirement planning essential for life.

1. Independence 

Most people worry about being a burden to their family in their old age. It can also be emotionally distressing to be dependent on someone else for your expenses. Retirement planning allows you to maintain a good lifestyle without depending on family members.

Some people think of retirement as a time for achieving goals that were ignored due to more pressing needs in life. If you put in time and effort into retirement planning, such dreams can come true with ease.

 2. Life Expectancy 

You may not realize it now, but life after retirement is considerably long. For example, if someone retires at the age of 60, the average life expectancy of 70-75 years gives them many years to manage their post-retirement fund. This is what makes retirement planning at the right age more crucial.

3. Medical Costs 

With each passing day, the cost of medical treatment is reaching new heights. A medical emergency can burn a massive hole in one’s savings. Furthermore, people are more susceptible to illnesses at an older age.

2. Life Expectancy 

You may not realize it now, but life after retirement is considerably long. For example, if someone retires at the age of 60, the average life expectancy of 70-75 years gives them many years to manage their post-retirement fund. This is what makes retirement planning at the right age more crucial.

3. Medical Costs 

With each passing day, the cost of medical treatment is reaching new heights. A medical emergency can burn a massive hole in one’s savings. Furthermore, people are more susceptible to illnesses at an older age.


Retirement planning is of immense importance to meet such expenses and receive quality medical care at a time of need.

4. Tax Relief 

Each earning individual wishes to reduce their tax liability and maximize their savings. The government of India allows certain tax benefits on several financial instruments, which you can include in your retirement planning agenda. It is an effective way to plan for your future and save money in the present simultaneously. Tax benefits are as prevailing tax laws subject to change.

5. Peace of Mind 

Your peace of mind is invaluable. The stress of managing money to meet your long-term and short-term expenses can be dreadful. It may even cause health-related issues such as hypertension and other unfortunate illnesses. It is more important to shield yourself from such problems at an older age.

Retirement planning is an effective method of ensuring a happy and healthy life for a long time.

When Should You Start with Retirement Planning?

There is no perfect time to start with retirement planning. At different stages in life, your financial profile may look different. However, it is advisable to begin retirement planning in the early years of life. It helps spread the investments over an extended period, thereby reducing the burden on your regular income.

Typically, retirement planning includes three phases of investment, accumulation, and withdrawal. The first phase should start at the age of 30-50 when you can afford to save or invest a fair amount. 

When Should You Start with Retirement Planning?

There is no perfect time to start with retirement planning. At different stages in life, your financial profile may look different. However, it is advisable to begin retirement planning in the early years of life. It helps spread the investments over an extended period, thereby reducing the burden on your regular income.

Typically, retirement planning includes three phases of investment, accumulation, and withdrawal. The first phase should start at the age of 30-50 when you can afford to save or invest a fair amount. 

It is essential to understand your risk-taking ability in terms of age, income source, and more considerable expenses such as a child’s education, loans, and marriage.

When you are nearer to retirement, the focus should be on availing of the benefits from the assets acquired over time. You can enjoy them in the form of a monthly income or a lump-sum amount on retirement.

Max Life Retirement Plans

Retirement can be an enjoyable time of life if you plan for it well. Investing in a suitable retirement plan at the right time can help you reap incredible benefits. It is vital to choose the right retirement plan according to your requirements. It is a choice that has a long-term and significant impact on your life.

Max Life Insurance offers some of the suitable life insurance plans in India to fulfill your retirement planning goals. We understand the importance of retirement planning in life and strive to provide the best features to suit the needs of every individual.

Different Max Life retirement plans offer a range of benefits such as guaranteed income for a lifetime, flexible payout options, guaranteed benefits transferred to nominees, and many more.

Max Life Forever Young Pension Plan*, Max Life Guaranteed Lifetime Income Plan**, and Max Life Perfect Partner Super# are among the best retirement plans available in India.

As the policyholder, you must consider specific features like premium payment terms, annuity options, and vesting age when selecting a retirement plan. Thorough retirement planning is necessary to enjoy a life of independence and happiness.

 

Frequently Asked Questions (FAQs) 

Q. How Do I Determine My Long-Term Financial Goals? 

A. Certain milestone events in life require significant financial planning, such as marriage, childbirth, education, home loan, or car loan. It depends on the nature of your income and lifestyle how much you can allocate to these expenses. Remember to layout a financial plan keeping inflation in mind.

Q. Should I Save For Retirement Or Other Major Life Expenses First? 

A. Your retirement planning is as essential as any other expense in life. You do not want to reach an age where the income source is compromised, and you have to make harsh compromises. However, take into account the urgency of other expenses in terms of your savings.

Q. What Is The Best Retirement Plan If I Am Self-Employed? 

A. Unlike the salaried people, self-employed people have a different retirement planning approach since they do not have an EPF. Depending on your profile, you must try to expand the investment portfolio with PPFs and mutual funds. However, keep in mind to have a specific financial instrument for a particular goal and not mix them.

Q. What Happens In Case Of An Individual’s Demise Before Withdrawing Retirement Benefits? 

A. In such a case, the retirement funds can be transferred to the beneficiary. You can assign a beneficiary at the time of purchasing a retirement plan.

Q. Should I Choose Lump Sum Payment Or Monthly Payment of Retirement Funds? 

A. The method of payout entirely depends on your personal choice. Consider your expenses after retirement to make the decision. If you require a large sum of money at once for specific needs, a lump-sum payout is wise.

However, if you wish to have a steady income source every month to meet general expenses, monthly payout would be a suitable option for you.

*Max Life Forever Young Pension Plan (UIN: 104L075V03; A Unit-Linked Non-Participating Individual Pension Plan)

**Max Life Guaranteed Lifetime Income Plan (UIN: 104N076V10; Non-Linked Non-Participating Individual General Annuity Savings Plan)

#Max Life Life Perfect Partner Super (UIN: 104N077V03; Non Linked Participating Individual Life Insurance Savings Plan)

 

ARN: Aug21/Bg/11