Effective retirement planning for a comfortable life post retirement

When planning for the future we think of everything from investment plans, insurance plans, health plans but very few people actually consider pension plans. People usually leave retirement planning for the last people or a few years before they’re due to retire. This is risky business because the best retirement plans are those that start early.

You never know when you may require money when you retire. It could be for a medical procedure, some new investments, helping out your children with their education or business ventures. Or it can be as simple as to travel, buy your dream house where you can spend your old age peacefully. Retirement plans India aren’t given much consideration, but this has to change. While you save for your child’s future, their education, their wedding and their businesses, you should also be saving for your own future as well.

Early retirement planning can help your create a pipeline of investment and accumulate a lump sum that you can use when you retire to lead a comfortable life. For effective retirement planning depending solely on your employer’s pension plans is not enough.  Here are some plans and schemes that you must invest in, in order to have a comfortable retirement.

1.  Invest in ULIPs: You can alter your ULIPs on the basis of what you want to save for, it can be your own business, your child’s education or your own retirement. Unit Linked Insurance Policies that focus on retirement plans invest in equity based funds to avoid taking risks, in turn providing you with handsome returns.

2.  EPFs: The Employees Provident Fund is another way to ensure return during retirement.     It is perhaps one of the most popular pension plans in India. Currently the rate of return from EPF is fixed at 8.5% p.a. EPF also offers deduction up to 1 lakhs limit under section 80C. The interest from EPF is tax free and withdrawal is also tax free if there is continuous service of 5 years.

3.  Invest in bonds: A bond is when a company borrows from you. Purchasing bonds of a particular company is like giving that company a loan. The company will pay you interest on your loan. In the case of some companies the interest can be as high as 10% or 12% p.a. These bonds usually have a maturity of 10 to 15 years. They’re a great way to invest your money for retirement.