Help yourself with endowment plans to retire rich

Help yourself with endowment plans to retire rich

Retirement should not mean compromising on one’s usual lifestyle. On the contrary, it is the time when a person should reap the benefits of his or her life’s hard work. Although pension plans are specially tailored to ensure you do just that, they are not the only option. There are endowment plans which can help you retire rich by securing you against the risk of living too long as well as providing for means of livelihood for you and your spouse. Let’s examine how this works: Why do I need a retirement plan?: To ensure that you retire rich, financial planning during your younger years is critical, especially since starting early is the key to building a strong retirement corpus. Some challenges that can come in the way of a rich retirement are the lack of social security and lack of a steady flow of income. Moreover, the rising cost of living would impact the standard of living post-retirement. However, without an upfront guarantee of how much you would get at retirement, planning your older years becomes difficult, which is where relying only on a typical retirement plan may not meet all of your objectives. Look beyond typical retirement plans to retire rich: Here are some of the features that a good pension plan should have: Building a corpus: You should build a corpus with no strings attached like compulsion to purchase an immediate annuity plan. It should offer flexibility and be hassle-free (like withdrawing the corpus at any time). Also, look at tax efficiency, in terms of payouts received from the plan. If planned carefully, endowment plans with features like guaranteed cash back can help build a corpus with limited premium payment and allows you to enjoy the payouts in the same plan. Provisioning for regular future income: While building a corpus, you should be able to get an estimate of what might be the annual payout post-retirement and later. A lump sum at retirement and the flow of a regular “guaranteed” future income could help provide that security. Additional windfall for luxuries: Post-retirement, you have the time to indulge in a few luxuries. Hence, it is good to invest in a plan that would provide for them. Such bonuses are offered by participating endowment plans which declare an accrued reversionary bonus, payable at the end of premium payment term, which can be timed with the retirement age. Life cover: Adequate life cover is essential at any phase and is even more critical after retirement. More often than not, people ignore this requirement or fail to find a plan that offers protection in old age when it is most necessary for their dependents. Endowment plans can help you retire rich: While there are various instruments available to help you plan your retirement, some specially designed endowment plans are an efficient solution to retire rich. One such plan is offered by Bajaj Allianz wherein a lump sum is paid at the end of the premium payment term that can be timed with the retirement age. Thereafter, the plan offers steady flow of guaranteed cash backs and bonuses for a chosen period. Most importantly, in contrast to typical retirement plans, such an endowment plan provides life cover beyond retirement as well as a maturity benefit many years thereafter.