Financial planning can be broadly classified into short-term and long-term plans. While short-term plans are more about how you are going to meet the recent goals or emergencies, long-term plans are about securing your future. Pension planning is one of the most important types of long-term plans. So, let’s give you a detailed idea today about why you need to sit with that pension calculator right away.
1. Peace of Mind
The first and foremost reason why you need a pension plan is to get peace of mind in the golden years of your life. You will not have financial worries to bug you in that phase of your life. So, you can focus on other priorities in life. Maybe you can focus on traveling now or start devoting more time to your hobbies.
2. Backup to Meet Emergencies
The uncertainties of life seem even scarier when you are not working anymore. Since you will not have a steady source of income anymore, there is all the more reason for you to be prepared for possible emergencies. When you have enough corpus saved up to meet the emergencies, you will not have to land up in a sudden financial fix.
3. Enjoying Tax Benefits
As per the Income Tax Act, of 1961, there are a host of tax deductions offered on retirement plans and pension savings. So, you get the twin benefits of reducing your taxable income on one hand and accumulating a handsome corpus on the other hand. All you need is to understand investing in which schemes can be the most beneficial to you and invest accordingly.
4. Protection From Inflation
Rising inflation affects every aspect of your life, right from the cost of daily living to the price of medicines. So, think of your pension plan as a way to be prepared to meet the rising inflation. You will not have to adjust your standard of living after retirement if you have enough saved up beforehand to help you sail through.
5. Beneficial for Individuals With No Pension
You might be an employee working in the private sector and your employer does not offer any provision for pension. In that case, you will have to make provisions for pension yourself. You will have to figure out the right pension amount that you would need every month and start saving towards that goal as early as possible.
6. Making Early Retirement An Option
Maybe you do not want to work till a certain age and then retire. You might just want to retire early. The responsibilities of life and the daily stress of work might start taking a toll on you. In such a scenario, if you have enough money saved up in your account, you can think of retiring early without any financial worry.
And that’s all! Did you figure out the right pension amount for you yet? If you have any queries regarding the right retirement corpus for yourself, talk to the people at your bank for assistance.