How to choose the best retirement plan
Retirement is a second chance to live your dreams. Travel the world and indulge yourself. You can buy what you want and spend evenings with friends. You have spent your life earning and working hard and shouldn’t spend your second innings life in crisis. Understand various retirement plans and choose one that suits your needs.
Immediate Annuity and Deferred Annuity Plans
An immediate annuity plan gives you fixed payments all your life. Your pension begins immediately after you buy the plan. You can choose payout options depending on your payment frequency (monthly quarterly, semi-quarterly, annually). A deferred annuity plan allows you to make a lump-sum payment or make regular contributions towards your corpus. Under this plan, your pension begins once the policy term is over. If you are still in the prime of your life, this might be beneficial as you have many years to build a corpus.
Guaranteed Period Annuity, Annuity Certain, and Life Annuity Options
A guaranteed period annuity option lets you secure your retirement and benefit your loved ones. There is a guaranteed payout for a certain number of years. For example, you buy a 20-year annuity payout plan. You will receive the payout for 20 years. In the unfortunate event of your death during the period, the nominee receives payments. An Annuity Certain plan offers fixed annuity for a specific number of years to the assured. A typical life annuity option offers a specified payout throughout your life. By choosing the ‘with spouse’ option, you ensure that they receive benefits after you.
Plans with Cover and Without Cover
A cover plan offers life cover during the accumulation phase of the policy. Yet, a large part of the premium is towards building a corpus. In the case of death, the plan will provide the family members a lump sum. A without cover plan, will not provide any life cover benefit. The nominee or beneficiary does not get any payout in event of death. A with cover retirement plan is ideal for young adults looking at retirement planning.
Unit Linked and Conventional Pension Plans
The choice between a unit linked and a traditional pension plan depends on your age, financial condition and appetite for risk. A unit linked plan will invest your money in stocks, bonds, and mutual funds. Since the equity market isn’t stable, market risk may impact your returns. A traditional plan will invest in safer avenues like government bonds and securities. Both plans might give you quality returns. An early retirement planner is likely to draw benefits from a unit linked plan. By continuing to make steady payments over a lengthier period of time you can cut risk.
There are a host of retirement options to choose from but starting early is the key to happy retirement.
Happy Investing
Source:Yahoofinance.com
Retirement is a second chance to live your dreams. Travel the world and indulge yourself. You can buy what you want and spend evenings with friends. You have spent your life earning and working hard and shouldn’t spend your second innings life in crisis. Understand various retirement plans and choose one that suits your needs.
Immediate Annuity and Deferred Annuity Plans
An immediate annuity plan gives you fixed payments all your life. Your pension begins immediately after you buy the plan. You can choose payout options depending on your payment frequency (monthly quarterly, semi-quarterly, annually). A deferred annuity plan allows you to make a lump-sum payment or make regular contributions towards your corpus. Under this plan, your pension begins once the policy term is over. If you are still in the prime of your life, this might be beneficial as you have many years to build a corpus.
Guaranteed Period Annuity, Annuity Certain, and Life Annuity Options
A guaranteed period annuity option lets you secure your retirement and benefit your loved ones. There is a guaranteed payout for a certain number of years. For example, you buy a 20-year annuity payout plan. You will receive the payout for 20 years. In the unfortunate event of your death during the period, the nominee receives payments. An Annuity Certain plan offers fixed annuity for a specific number of years to the assured. A typical life annuity option offers a specified payout throughout your life. By choosing the ‘with spouse’ option, you ensure that they receive benefits after you.
Plans with Cover and Without Cover
A cover plan offers life cover during the accumulation phase of the policy. Yet, a large part of the premium is towards building a corpus. In the case of death, the plan will provide the family members a lump sum. A without cover plan, will not provide any life cover benefit. The nominee or beneficiary does not get any payout in event of death. A with cover retirement plan is ideal for young adults looking at retirement planning.
Unit Linked and Conventional Pension Plans
The choice between a unit linked and a traditional pension plan depends on your age, financial condition and appetite for risk. A unit linked plan will invest your money in stocks, bonds, and mutual funds. Since the equity market isn’t stable, market risk may impact your returns. A traditional plan will invest in safer avenues like government bonds and securities. Both plans might give you quality returns. An early retirement planner is likely to draw benefits from a unit linked plan. By continuing to make steady payments over a lengthier period of time you can cut risk.
There are a host of retirement options to choose from but starting early is the key to happy retirement.
Happy Investing
Source:Yahoofinance.com
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