A retirement plan helps you save for a secure future by accumulating some of your savings over time. The retirement plan is designed to help you deal with uncertainty after retirement and ensure that you will always have a source of income. It is essential to have a retirement plan, regardless of whether or not one has a large amount of savings. A retirement plan can create a financial cushion in the long run, ensuring a financially sound retirement. In a retirement plan, the insured contributes a specific amount regularly until retirement.
Regularly, the accumulated amount is returned to the insured as retirement or annuity. Retirement plans are not only meant to protect the financial future of an individual after retirement but also to equip an individual with tools to deal with the unforeseen circumstances that might arise after retirement. Therefore, you must choose the best investment options to secure your cash flow and meet your basic daily needs after retirement.
Listed below are the best retirement plans for post-retirement goals in India
National Pension Scheme
The National Pension System is a long-term investment plan launched by the Government of India in cooperation with the Pension Fund Regulatory and Development Authority (PFRDA). Investors can regularly invest during their working lives, withdraw a lump sum and use the remaining corpus to purchase an annuity to supplement their retirement income. The National Pension System (NPS) is available to all Indian citizens over 60.
Post office FD
The Indian Post Service, which runs most of the post offices in our country, offers Post Office FD at a rate of 5.50 – 6.70% p.a. for tenures ranging from 1 year to 5 years. In the case of the Post office FD, the interest rate applicable to the general public is 6.70 % per annum. By using these Post office FD schemes, depositors get the highest level of capital protection and income security, as the Union Ministry of Finance backs them with a sovereign guarantee.
Public Provident Fund
The PPF is a government-backed long-term savings plan that provides an attractive rate of interest, as well as a reasonable return on investment. There are various nationalised banks and post offices where you can open a PPF account. You can earn risk-free returns with a PPF. There is no restriction on who can invest in PPF except non-resident Indians.
Bank Fixed Deposits
In India, Bank Fixed Deposits have been a trusted investment plan for years, similar to Post office FD. Long-term Fixed Deposit accounts allow you to save lump sum amounts for a specific period and offer a guaranteed return on the investment. Upon opening the Fixed Deposit account, a fixed interest rate is applied, and the rate remains the same throughout the tenure. Therefore, investing in a Fixed Deposit scheme will provide you with guaranteed returns. However, it is important to note that senior citizens are eligible for higher interest rates than standard FD schemes.
Guaranteed Period Annuity
Guaranteed Period Annuities are annuities that offer a guaranteed return of principal over a fixed period, as implied by their name. Throughout the entire period of guarantee of the annuity, the annuitant’s immediate family members will receive a guaranteed income even after the death of the Policy Holder during the remaining life expectancy of the annuitant.
Life Annuity Pension Plan
Different types of best investment options are available in India, but life annuity is the most popular. A person who holds a life pension annuity policy under this plan can expect to receive a regular income from it throughout their lifetime. In addition, upon death, the policyholder’s spouse can share a separate annuity with the policyholder.
Unit Linked Insurance Plans (ULIP)
With their long-term investment capabilities, ULIPs have proved to be one of the best investments for retirement. ULIPs provide high returns, making them a good choice if you want to simultaneously beat inflation rates. There is also a possibility that you can decide which funds you would like to invest in based on your willingness to take risks. The purpose of ULIPs is to allow you to build enough wealth to sustain you throughout your retirement years. With a ULIP, you can switch between various funds of your choice anytime without being charged extra fees or deductions.
The most crucial step toward financial security is to plan your retirement. You need to plan your investments carefully so that their returns can replace your regular income in the long run. Suitable retirement investments are crucial if you want to simultaneously meet your family’s needs and live a debt-free life.