6 Ways to Ensure Regular Income After Retirement
Most people don’t think ahead financially, and it often takes a toll on them when it’s time to retire. The average life expectancy in India is also rising, with the current statistics measuring it at an average of 68.56 years. So, by the time you retire, there is still a long way to sustain yourself – without an income. Considering the inflation, investments, expenses and every other financial tit-bit in mind, you’d require a lot of money to live by your current standards after you retire.
So, what can be done in such a situation? Firstly, you’d need a pension plan calculator to actually know how much money you will need when you retire. Insurers like Future Generali offer a detailed pension plan calculator and a host of options ranging from ULIPs, annuity plans and a lot more. With high-returns, tax benefits and systematic partial withdrawal – such insurers offer total insurance and retirement solutions.
If you’re looking to ensure regular income after retirement, here are six proven ways that will help you sail in that direction.
- NPS (National Pension Scheme)
National Pension Scheme is a popular retirement scheme. With NPS, you can make regular payments during your working years. It is a market-linked investment plan where the subscribers can choose an active or auto option. The active option allows you to choose your own investments while the auto option allows fund allotment made to different assets. Upon retiring, you have many options – you can either withdraw a part of the corpus in lumpsum and use the rest to buy an annuity that will fetch regular income or withdraw the entire amount basis your requirement. However, do note that the scheme is partially taxable. NPS is highly recommended as it is a low-cost and tax-efficient scheme to build a corpus for your retirement.
- Annuity Plans
An annuity plan, also known as a pension plan pays out a fixed stream of payments after one retires. You will have to invest in the annuity, and it will make payments on a set future date. Typically, the length of your payment period will determine the payments. Buying an annuity plan from any of the life insurance companies will safeguard you financially after you retire. An annuity plan is payable from 5 years to life.
- ULIPs (Unit Linked Insurance Plan)
ULIP is a financial product offered by life insurance companies that gives both investment and insurance in a single integrated plan. It gives additional benefit of market-linked returns. Just like any other life insurance policy, you can pay either a monthly or annual premium. The premium is split, and one portion is invested in the market, while other is used to provide life cover. It is a long-term investment plan and is an ideal instrument for your retirement.
You need to choose a policy from any of the insurers and pay premium till retirement to get maturity benefit. However, in the meanwhile, if there is an unforeseen incident, the person you nominee will get the death benefit. ULIPs are exempted from tax under section 80C, including the payouts you receive from the plans.
- Retirement Plans
Many insurance companies offer specifically designed retirement plans. These plans have the benefits of an investment and life insurance. You need to pay a regular premium, which is invested in the market. Whenever you want the pension to start, you can choose to have regular payouts. In fact, you can even withdraw a particular sum in lumpsum, and the balance will be paid as a pension.
- Rental Income
The cost of housing in India is skyrocketing, making rental income a real contender of regular income after retirement. Even though the initial investment can be massive, starting early to invest in realty for retirement income is a lucrative option. Real estate also has much scope of capital appreciation.
- Freelance
Working your entire life will mould you into an active person who might have difficulty sitting idle. Yes, you’re retiring from work, but you can still spend a couple of hours working. It will make you money and keep boredom away. You’ll have much experience, and there will be a dire need of your expert skills. You can become a tutor, consultant or teacher to have a side income and support your retirement.
Today, in this day and age it is essential to start planning for retirement as early as possible. Not only will it lead to a hassle-free retirement, but you’d have plenty of funds to sail through your life smoothly. Make good use of a pension plan calculator and start planning your retirement from today itself. The market is laden with insurers and financial institutions offering a host of plans and schemes – the only catch is making an informed decision and choosing something that will align with your goals.
