5 Easy Steps to Secure Your Pension: Retirement Planning Guide

Pension Planning

Planning and preparing for any goal, challenge, or period will increase the chances of success and make life easier. Similarly, retirement planning is important. It helps you lead the retirement life you desire, free from stress, with a good lifestyle, some hobbies, and vacations to keep you entertained. Let’s dive into how you can secure your retirement with pension planning:

Pension planning refers to the planning and investment in pension plans that provide passive income to you after your retirement. This passive income helps you lead your life without compromising much on your lifestyle. Here are 5 ways in which pension planning can help you secure retirement:

1. Begin Early

Just like many other investment options available out there, beginning early is your best bet. When you begin your pension planning early, you get the benefit of compounding, which maximizes your returns and better secures your retirement.

Especially, with a retirement plan like a ULIP, you get the benefit of mortality charges being added to your NAV in the form of units once your fund amount crosses your coverage amount.

2. Create a Habit

With any good thing, creating a habit is important for you to reap its benefits. Pension planning works well, but you need to invest in the chosen plans with discipline. Consistency in investments will keep you adding to your corpus and will also help in reducing the chances of unnecessary expenses. Impulse purchases can undermine discipline and derail the pension planning approach.

3. Deciding how much to invest

The amount you invest for your pension planning activities depends on two factors, your current income and your desired retirement corpus.

You can determine the amount of income you will have in the future and multiply it by 15 to have a decent corpus once you retire. This is just the retirement corpus, you should have investments in other instruments that help you round out the corpus better.

4. Reviewing and revising

Like every other plan, pension planning is not a one-time effort. Reviewing the plan in a half-yearly fashion and comparing it with industry benchmarks, and realistic expectations will give you an idea of its performance. You can use that as a basis to see if you need to tweak things as per your plan and revise your strategies.

5. Include tax benefits

Don’t count out tax benefits in your retirement planning or discount them from the premium paid. Tax benefits are available for most retirement plans. For example, ULIPs allow you to get exemptions from the premium paid up to a certain level, while allowing you to receive a tax-free maturity amount.

This is why ULIPs are preferred by a lot of people. With the amendments in how ULIPs operate, they have become comparable to mutual funds.

If you apply the above-mentioned points, you can retire successfully and lead a peaceful retirement life. This will allow you to provide comfort to your loved one, even after you retire.