How to Build a Pension Plan for your Retirement?

  • Start Early
  • Contribute regularly
  • Diversify
  • Expert Advice
  • Long term planning

In India only 4% of the total population is either having a pension for their Names or had planned a pension plan for them.  Rest of the population is totally unaware or not had a thought of the pension. It is as much important as like planning for a term plan. Early death and Late Death both are very dangerous. Now in India, awareness has increased  for term plans, But still Pension planning is under planned. 

Retirement is the period where your income has stopped but the expenses has not stopped. We need to take care of those rainy days where the income is very less or even zero.It is the time to spend and enjoy the receding days  of your life. There are many ways to secure your retirement days such as government bonds, equities, recurring deposits, shares and debentures, gold and silver and the most important pension plans from insurance companies in India. These pension plans provide you the financial security to live with pride without compromising on your living standards. With the high cost of living and rising inflation, pension planning has become more important.

Here we had given Five essential tips that can help you to build a pension plan that will make you feel confident about living the retirement you want.

Think Long Term

You may think that you have more time for saving for your retirement. At present you may think that you may not need a pension plan. But think beyond the near future. Imagine of the day when your income stops but still you are in requirement of income. Now you may have Age and strength to work. Think what happens when you don't have these two. Think What you want to do after retirement, think where will the money come, What are the options left now and this will help you estimate the amount of savings you require for your future dreams and accordingly take a desired step ahead.

 Start as early as possible

There is no right age to start for starting towards your pension. The Right age is your age now.To build a good retirement pension plan, it is very important that you should plan well in advance. Early planning helps contributing more funds and help average the fluctuations and risks in the investments.

Increase your contribution whenever possible.

With the increase in the overall inflation, cost of living and increased life expectancy, there is a higher chance that you may end up requiring more pension than planned. So it is always better to keep our target savings overachieved. Target atleast 15% of your CTC as annual savings towards your pension. Increase the contribution whenever possible. You can save additionally during bonus and increments.

Diversified Savings

Your savings should be diversified into various options like shares, Mutual funds, gold, bonds, etc.  Any adverse market situation shouldnt be biting the whole of your pension savings. Always have an investment mix if 2 or 3 products. Allocate the savings between equity and bond investments according to your age factor. 

 Make your savings grow. Splitting your investment across various sectors and asset types can help overcome the effects of big market fluctuations. Investing on a regular basis helps balancing market risks. 

 Take Expert Advice

Retirement planning is all about accumulating the wealth for your future needs where It is the time to fulfill your left out dreams and live a happy life. If you find it difficult to execute a plan on your own take an advice from a financial expert.  They can help evaluate your personal situation and suggests you the type of investment required for your retirement living.

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