Saving for retirement is a great relief for anyone wishing to spend his old age happily, free from the financial worries. A pension and retirement plan is designed to provide a fixed regular sum to a person after his retirement from his work. There are various retirement and Pension Plan being offered by insurance companies where the beneficiary has to invest a sum at the time of enrolling for the program. This enrolment may attract a lump sum payment or continual yearly instalments that have to be paid for a fixed number of years.
How to Plan for Retirement
Do saving and investing at the same time: Al-right you save generously, but do you know that saving without investing may not grow your funds substantially. In fact, the rising inflation rate may even bite into your savings. At the same time it is also important to consider that in your old age the medical bills may wipe out your hard earned money even without giving you a trace of it. Even a small visit to a hospital may dent your savings. That’s why it is advisable to save and invest at the same time. Saving and investing make your sum grow and multiply over time.
Kinds of Plans
Deferred Annuity Plan: Under this plan, the pension is paid after a deferred period as decided by the policyholder. If the term expires then the assured sum is invested to generate regular income. This plan suits those who have many years left towards their retirement.
Immediate Annuity Plan: This plan is for those who want to avoid paying regular instalments by paying a lump sum payment. This plan assures a fixed payment throughout the life of the policy holder. Different kinds of annuity plans are:
Annuity certain: In this plan, the sum paid by insurance company remains fixed for a designated number of years.
Guaranteed Period Annuity: As the name suggests, under this plan the policy holder gets a guaranteed pay for a designated number of years. The prime benefit of this plan is that this plan pays even when the policy holder is no more there during the policy period. This means the beneficiary will be paid the assured sum in the absence of the policy holder.
Life Annuity: This plan guarantees a regular amount for the entire life of the policy holder. In case the policy holder dies, his nominee will be given the maturity amount along with the accrued bonus.
There are many protection plans in the market. Your choice entirely depends upon you.