All you ought to know about pension plans
Retirement is a time that most working individuals look forward to. But, opting for retirement involves a lot of planning for both – finances and day-to-day life. While planning for daily activities is subject, financial planning can be discussed. Today, the market gives you many options to create a sufficient financial corpus for your life after retirement. One of them is pension plans.
In this article, we will learn about:
- What are pension plans?
- What are the benefits of Pension plans?
- How can a pension plan calculator help?
Now, let’s take a look at the above-mentioned points in detail.
Pension plans:
Pension plans or as commonly known, retirement plans come with dual benefits of both – investment and insurance cover. All you have to do is invest in a decided amount regularly to create your financial corpus. This investment will take place in a phase-by-phase manner. The accumulated funds will then serve as a steady income once you retire.
Most advisors will advise you to start this investment at an early age. This is because the earlier you start; more are your chances of building a substantial financial corpus.
Benefits of pension plans:
Guaranteed income
One of the reasons why you should opt for a pension plan is to keep a constant source of income even after you retire. The pension schemes in India offer a two major investment options for pension – the deferred plan and the immediate plan. In the deferred plan you can get a fixed and steady income. In an immediate plan your income will start as soon as the investment is done. You can use the pension plan calculator to see how your finances will look like once you opt for the investment.
Tax benefits
Another benefit of opting for the pension plan is tax exemption. Pension plans are entitled to tax wavering under Section 80C. The Indian Income Tax Act, 1961, also offers tax exemption under Chapter VI-A. The specifics of this chapter are mentioned elaborately in Section 80C, 80CCD, and 80CCC.
Duration of accumulation
As an investor you have the flexibility to either pay the premium all at one during the accumulation period or pay in periodic intervals. The accumulation duration is a peek time where your investments and gains have a good chance of growing. This duration also helps in building up sizable financial corpus.
Pension plan calculator:
One of the important tools to use before you buy a pension plan, is the calculator. The pension plan calculator helps your estimate the kind of financial corpus the plan will create. It also helps you calculate your monthly or periodic premiums. Once you have calculated this you will have better idea of how your finances will look, once you retire.
Retirement is a time that most working individuals look forward to. But, opting for retirement involves a lot of planning for both – finances and day-to-day life. While planning for daily activities is subject, financial planning can be discussed. Today, the market gives you many options to create a sufficient financial corpus for your life after retirement. One of them is pension plans.
In this article, we will learn about:
Retirement is a time that most working individuals look forward to. But, opting for retirement involves a lot of planning for both – finances and day-to-day life. While planning for daily activities is subject, financial planning can be discussed. Today, the market gives you many options to create a sufficient financial corpus for your life after retirement. One of them is pension plans.
In this article, we will learn about:
- What are pension plans?
- What are the benefits of Pension plans?
- How can a pension plan calculator help?
Now, let’s take a look at the above-mentioned points in detail.
