Retirement Plans for 2022

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Retirement And Pension Policy

Apart from providing for our family, most of us are working super hard, sacrificing our today for the freedom of retiring as early as possible.

Independent. Peaceful. Comfortable. These are the words we all think of, when we visualise our retirement. But how do you plan and execute an optimal financial plan to ensure your golden years are really golden? How do you plan for a comfortable retirement - within your current resources and income, while also planning for financial goals for your family - like education, marriage and more.

This is where retirement plans come in.

What Are Retirement and Pension Plans?

Retirement and pension plans are essentially your financial security blankets for the golden years of your life. Retiremnt plans allow you to save and invest a part of your income during your working years, so that you can still enjoy a stable and comfortable lifestyle without worrying about your finances.

Think of retirement plans as your source of income in the retirement phase, ensuring you continue to live with dignity and independence, pursuing hobbies or passions you've always dreamed about.

How do retirement plans work?

Retirement plans are designed to help individuals save and invest money for their future retirement. They work by allowing you to contribute a portion of your income into a dedicated account, which is then invested in various financial instruments such as stocks, bonds, and mutual funds. The goal is to grow your savings over time so that you have a substantial fund to rely on during your retirement years. Here's a general overview of how retirement plans work:

  • Contribution: You contribute a certain percentage of your income or a fixed amount to the retirement plan. This can be done monthly, quarterly, or annually, depending on the plan's terms.
  • Investment: The contributions are invested in a diversified portfolio of assets. The investment options are typically managed by financial professionals and can range from conservative to aggressive, depending on your risk tolerance and retirement goals.
  • Tax Benefits*: Many retirement plans offer tax advantages. For example, contributions to a traditional NPS account or PPF may be tax-deductible, and the earnings grow tax-deferred until withdrawal.
  • Compounding: Over time, the money in your retirement account earns interest or investment returns. This growth is compounded, meaning that the returns themselves earn returns, leading to exponential growth of your savings.
  • Vesting: Some employer-sponsored retirement plans have vesting schedules, which means you gain full ownership of employer contributions after a certain period of employment.
  • Withdrawals: Upon reaching retirement age, you can start withdrawing funds from your retirement account. The age at which you can make penalty-free withdrawals varies by plan, typically around 59½ to 65 years.

    By consistently contributing to a retirement plan and taking advantage of compounding interest and tax benefits, you can build a substantial nest egg to support your lifestyle in retirement.

    Let’s understand this better with the help of an example:

    Meet Shivani, a 32-year-old graphic designer from Pune, who decided to take charge of her retirement planning early. Understanding the importance of starting young, Shivani bought a retirement plan with a goal of retiring by 60. She opts for a plan where she contributes a fixed amount monthly, benefiting from the lower premiums due to her young age and the long-term growth potential of her investment.

Shivani’s Plan

  • Monthly Contribution: She decides to invest ₹5,000 monthly.
  • Investment Period: Her plan spans 28 years, giving her ample time to build a substantial retirement corpus.
  • Growth: Her contributions are invested in a mix of equity and debt, balancing risk and offering the potential for higher returns over time.
  • Payout: At retirement, Shivani can choose to receive a lump sum, a monthly pension, or a combination of both, depending on her needs and lifestyle preferences.


Outcome

By the time Shivani retires, her consistent contributions have grown significantly, thanks to the power of compounding and strategic investments. She’s not only secured her own future, allowing her to retire comfortably and pursue her passion for travel and art, but she’s also ensured that she won’t be a financial burden on her family.

Shivani's example shows us that with a little foresight and regular contributions, securing a financially stable retirement is achievable. Starting early gives you a longer runway to build your nest egg, leveraging time and compounding to your advantage. Remember, it’s never too early or too late to start planning for retirement, but the sooner you begin, the smoother your journey to retirement will be.

Our Pension Plans
ABSLI Guaranteed Annuity Plus
ABSLI Guaranteed Annuity Plus
Multiple annuity options, Regular income stream.
ABSLI Saral Pension Plan
Guaranteed# lifelong income
ABSLI Saral Pension Plan
Top-up option for annuity
ABSLI Saral Pension Plan
Single/Joint Life cover option
ABSLI Saral Pension Plan
Deferred annuity option
Get Annual Annuity:
₹89,496/-~
Give:
₹10 lacs/-²
ABSLI Empower Pension Plan
ABSLI Empower Pension Plan
Unit-Linked Pension Plan, lump sum on maturity.
ABSLI Saral Pension Plan
2 plan options
ABSLI Saral Pension Plan
Guaranteed# Additions
ABSLI Saral Pension Plan
Financial protection for your family
ABSLI Saral Pension Plan
Maximum Vesting Age 80 years
Get Fund value:
₹13.57 lakh
Give Premium:
₹1 lakh³
ABSLI Saral Pension Plan
ABSLI Saral Pension
Single premium. Guaranteed# regular income for lifetime
ABSLI Saral Pension Plan
Financial Security for family
ABSLI Saral Pension Plan
No medical tests
ABSLI Saral Pension Plan
Single Life/Joint Life Annuity
ABSLI Saral Pension Plan
Choice of multiple payout option
Get Annual Annuity:
₹13,809/-
Give:
₹2,50,000/-⁴
ABSLI Empower Pension – SP Plan
ABSLI Empower Pension – SP Plan
Single premium Unit Linked Pension Plan
ABSLI Saral Pension Plan
Guaranteed# Additions
ABSLI Saral Pension Plan
Flexible Investment Option
ABSLI Saral Pension Plan
Single premium amount option
ABSLI Saral Pension Plan
Vesting benefit as per plan option chosen
Get:
₹1,78,366
Single Premium:
₹1,00,000⁵
ABSLI Guaranteed Annuity Plus
ABSLI Nishchit Pension Plan
Non-Linked No-Participating Individual Pension Plan
ABSLI Saral Pension Plan
Fully Guaranteed# Corpus
ABSLI Saral Pension Plan
Guaranteed# & Loyalty Additions~
ABSLI Saral Pension Plan
Choice of Premium Payment Term
ABSLI Saral Pension Plan
Life Insurance Cover
Get:
₹ 21,35,000
Give:
₹5,00,000/-⁶
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Why Should You Plan for Retirement Today?

Starting your retirement planning early can be one of the best decisions you'll ever make. Here's why

Importance of Pension Plan
Achieve Financial Independence
Financial dependence can be tough. Planning retirement ensures you remain financially self-sufficient and don’t need to rely on others for financial support.
Importance of Pension Plan
Ensure a Comfortable Lifestyle
You’ve worked hard all your life. Retirement is the time to enjoy the fruits of your labour without financial stress.
Importance of Pension Plan
Combat Inflation
The cost of living will only go up. Planning now means you’re preparing to meet those future costs head-on.
Importance of Pension Plan
Compound Interest Magic
The earlier you start, the more your money grows thanks to the power of compound interest. Small savings can turn into a large sum over time.
Importance of Pension Plan
Medical Emergencies
As we age, healthcare becomes a priority. A robust retirement plan covers medical expenses, keeping your savings intact.
Importance of Pension Plan
Leave a Legacy
It’s not just about you. Proper planning means you can leave behind a financial legacy for your loved ones, contributing to their future well-being.

Types of Retirement & Pension Plans in India

Let's break down the various types of retirement and pension plans available in India into a simple table to help you understand your options:

Type of Plan Description Suitable For
Deferred Annuity You pay premiums for a specified period, and the pension starts after a certain age. You have the option to make a lump sum payment or regular payments. Individuals who are still working and want to build a corpus for retirement over time.
Immediate Annuity You make a lump sum investment, and the pension starts immediately after the investment is made. There are various options for payout frequency. Individuals who have a lump sum available and wish to start receiving pensions immediately, such as retirees.
National Pension System (NPS) A government-sponsored pension scheme that allows you to invest in equity and debt markets, with the option to withdraw a part of the corpus as a lump sum at retirement and the rest as a pension. Individuals looking for a mix of low-cost, tax-efficient, and flexible retirement savings.
Unit Linked Pension Plans (ULPPs) These plans invest a part of the premium in the stock market. The returns are subject to market risks but have the potential for higher growth. Individuals looking for market-linked growth for their retirement corpus along with tax benefits*.
Guaranteed# Return Plans These plans offer a guaranteed# return on the investment after a certain period, which is specified at the time of policy purchase. Individuals looking for safe and guaranteed# returns on their retirement savings.
Pension Funds These are specialized investment funds that allocate contributions to various securities for long-term growth, managed by professional fund managers. Individuals looking for diversified investments managed by professionals to accumulate retirement savings.

How much should you contribute to your retirement?

Calculating your retirement contribution depends on several factors: your current age, the age at which you plan to retire, your expected retirement lifestyle, and the returns on your investments. Here’s a simplified approach to get you started:

  • Step 1: Estimate your annual expenses during retirement, adjusting for inflation.
  • Step 2: Deduct any guaranteed# income you expect to have (like a pension).
  • Step 3: Calculate the total corpus needed for retirement.
  • Step 4: Determine how much you need to save each month to reach that corpus, considering the expected rate of return.

Example

Let's say Neha, 30, wants to retire at 60 with a retirement period of 25 years. She expects her annual expenses to be around ₹6 lakhs in today's terms. Assuming an inflation rate of 6%, her expenses at retirement would be approximately ₹28.8 lakhs annually.

To maintain her lifestyle for 25 years, she would need a corpus of about ₹4.32 crores, assuming a post-retirement return of 7% and inflation of 6%.

Using a retirement calculator, Neha calculates she needs to save about ₹15,000 per month for the next 30 years, assuming an average annual return of 10% on her investments.

Parameter Value
Age of Neha 30 years
Retirement Age 60 years
Retirement Period 25 years
Annual Expenses (Today's Terms) ₹6 lakhs
Inflation Rate 6%
Annual Expenses at Retirement ₹28.8 lakhs
Required Retirement Corpus ₹4.32 crores
Post-Retirement Return 7%
Monthly Savings Required ₹15,000
Investment Return 10% (average annual)

Benefits of Retirement & Pension Plans

Investing in retirement and pension plans comes with several advantages:

  • Financial Security: Ensures a steady income post-retirement, allowing you to maintain your lifestyle without dependency.
  • Tax Benefits*: Contributions to certain retirement plans are eligible for tax deductions under sections 80C, 80CCC, and 80CCD of the Income Tax Act.
  • Compounding Growth: The power of compounding over a long period can significantly increase your retirement corpus.
  • Inflation Protection: Investing in plans that offer returns higher than the inflation rate can protect your purchasing power in retirement.
  • Customizable: Many plans offer the flexibility to choose your investment options, contribution levels, and payout methods.
  • Legacy Planning: Some plans allow you to nominate beneficiaries, ensuring your loved ones are financially taken care of in your absence.
    By carefully selecting the right retirement plan and contributing diligently, you can secure your golden years and enjoy peace of mind knowing you’re well-prepared for the future.

6 Steps to Find the Best Retirement & Pension Plans in India

Finding the right retirement and pension plan can seem daunting, but breaking it down into manageable steps can help. Here’s how you can approach this important decision

Importance of Pension Plan
Assess Your Needs
Consider your current age, expected retirement age, lifestyle goals, and financial obligations. Understanding your needs will help you determine the kind of plan that suits you best.
Importance of Pension Plan
Research Available Plans
Look into different types of retirement plans available in the market, such as deferred annuity, immediate annuity, National Pension System (NPS), Unit Linked Pension Plans (ULPPs), and more. Each has its own benefits and limitations.
Importance of Pension Plan
Compare Features and Benefits
Evaluate plans based on their features, benefits, flexibility, and the investment options they offer. Consider the plan's growth potential, risks, and how it aligns with your risk appetite.
Importance of Pension Plan
Check the Insurer's Reputation
Research the financial stability, claim settlement ratio, and customer service record of the insurance companies offering these plans. A reliable insurer can make a big difference in the long run.
Importance of Pension Plan
Read Reviews and Get Advice
Look for reviews from existing customers and seek advice from financial advisors or retirement planning experts. Personal experiences and professional guidance can provide valuable insights.
Importance of Pension Plan
Understand the Terms and Conditions
Carefully read the policy documents to understand the terms, conditions, and any exclusions or charges that may apply. Knowing these details upfront can prevent surprises later on.

Why Should You Use a Retirement Calculator?

A retirement calculator can be a powerful tool in planning for your golden years. Here’s why you should use one

Importance of Pension Plan
Estimate Required Savings
It helps you estimate how much you need to save to meet your retirement goals
Importance of Pension Plan
Account for Inflation
Calculators can adjust for inflation, giving you a realistic picture of future financial needs
Importance of Pension Plan
Plan Contributions
You can figure out how much you need to contribute monthly or annually to reach your desired retirement corpus.
Importance of Pension Plan
Impact of Returns
Allows you to see how different rates of return can affect your savings and the final corpus.
Importance of Pension Plan
Adjust Retirement Age
Experiment with different retirement ages to see how extending or reducing your working years affects your savings.

How to buy ABSLI Retirement Plans?

Purchasing a retirement plan from Aditya Birla Sun Life Insurance (ABSLI) is straightforward. Follow these steps to secure your future:

  • Explore Options: Visit the ABSLI website to explore the various retirement plans offered. Each plan has unique features tailored to different needs.
  • Contact ABSLI: Reach out through the website, via phone, or by visiting a local branch. An ABSLI advisor can help you understand which plan best fits your needs based on your financial goals and circumstances.
  • Provide Necessary Information: You’ll need to provide personal information, financial details, and your goals for retirement planning. Be prepared with documents related to your identity, address, income, and any other required information.
  • Choose a Plan: Based on the advisor's recommendations and your own research, choose the retirement plan that best suits your needs.
  • Complete the Application: Fill out the application form, either online or in paper format, and submit it along with the required documents.
  • Make the Payment: Pay the initial premium through the available payment options. You can choose from various payment modes like online transfer, cheque, or others as provided by ABSLI.
    By taking these steps, you can ensure a smoother transition into your retirement years with a plan that’s tailored to your needs, offering peace of mind and financial security.

Assistance to buy retirement plans online

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Need help with your existing policy?
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Retirement Plan FAQs

To receive a monthly pension of INR 50,000, you need to accumulate a substantial retirement corpus that can sustain this payout. Assuming an annual interest rate or annuity return rate of 6% post-retirement, you would need a corpus of approximately INR 1 crore to generate INR 50,000 monthly (since 6% of 1 crore is 6 lakhs, divided by 12 months gives approximately 50,000 per month). Planning early, choosing the right retirement plan, and making consistent contributions can help you build this corpus. Using a retirement calculator can help you understand how much you need to save regularly to achieve this goal.

Parameter Value
Monthly Pension Desired INR 50,000
Annual Interest/Annuity Return Rate 6%
Required Retirement Corpus INR 1 crore
Monthly Interest Income INR 50,000 (6% of 1 crore divided by 12 months)
Strategy Early planning, choosing the right retirement plan, and consistent contributions
The ideal age to start a retirement plan is as soon as you begin earning. Starting early, even in your 20s, allows more time for your investments to grow, leveraging the power of compounding. The earlier you start, the lesser you need to save each month to reach your retirement goals.
Withdrawal terms depend on the specific retirement plan you choose. Some plans allow partial withdrawals under certain conditions like critical illness or financial hardship, but they may come with penalties or impact the final payout. It's important to review the terms and conditions of your plan.
Yes, many retirement plans offer tax benefits*. Contributions made towards plans like NPS are eligible for tax deductions under Section 80C and Section 80CCD of the Income Tax Act. The pension received upon retirement may be taxable depending on the plan and current tax laws.
Choosing between a lump sum or monthly pension payout depends on your retirement needs and financial planning. A lump sum might be suitable if you have significant expenses planned, like buying a home. Monthly pensions provide a steady income stream, ensuring financial stability. Consider consulting a financial advisor to make an informed decision.
Yes, you can invest in multiple retirement plans based on your financial goals, risk appetite, and need for diversification. Having multiple plans can help cover different aspects of retirement planning, including healthcare, inflation, and lifestyle maintenance.
Inflation reduces the purchasing power of your money over time, meaning you will need more money to maintain the same lifestyle in the future. It's crucial to choose retirement plans that aim to offer returns above the inflation rate to ensure your retirement fund grows in real terms.
The management of your retirement plan if you move abroad depends on the terms of your plan and regulations of the country you move to. Some plans may allow continuation, while others might require you to withdraw or transfer your funds. Consult your financial advisor and plan provider for guidance.
Most financial institutions provide online access to your retirement account, where you can track the performance, see your balance, and monitor contributions. Regular statements and reports are also typically provided for transparency.
If your financial situation changes, review your retirement plan to see if adjustments are needed. You might need to increase contributions, change your investment strategy, or even pause contributions temporarily. Most importantly, communicate with your financial advisor or plan provider to explore your options.
  • Age: The minimum age to buy a retirement plan typically ranges from 18 to 65 years, depending on the policy.
  • Income: Some plans may have minimum income requirements to ensure the policyholder can afford the premiums.
  • Health: A medical examination may be required for certain plans, especially if you're above a certain age or opting for a high coverage amount.
  • Investment Horizon: You should have a clear investment horizon, usually until retirement age (e.g., 60 years), to ensure the plan matures when you retire.
  • Identity Proof: PAN card, Aadhaar card, Passport, Voter ID, etc.
  • Address Proof: Aadhaar card, Passport, Utility bills (electricity, water, gas), Bank statement, etc.
  • Age Proof: Birth certificate, Passport, PAN card, etc.
  • Income Proof: Salary slips, Income tax returns, Bank statements, etc.
  • Medical Reports: If required, based on the plan and your age.
  • Photographs: Passport-sized photographs.
  • Notify the Insurer: Inform the insurance company about the claim as soon as possible.
  • Submit Required Documents: Provide the necessary documents, such as the policy document, ID proof, bank account details, and any other documents requested by the insurer.
  • Claim Processing: The insurer will verify the documents and process the claim.
  • Payout: Once approved, the claim amount or annuity payments will be disbursed to the policyholder or nominee, as per the terms of the policy.
    It's important to read the policy document carefully and understand the specific requirements and procedures for the retirement plan you choose.
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  • Disclaimer

    For more details on risk factors, terms and conditions, please read sales brochure before concluding the sale.
    * Tax benefits are subject to changes in tax laws. Kindly consult your financial advisor for more detail.
    # Provided all due premiums are paid.
    ~ ABSLI Guaranteed Annuity Plus, Male age 60 years, Annuity Option -Life Annuity, Annuity Payout Frequency-Annual, Option chosen of Premium, Purchase Price Rs.10,00,000, Level Annuity, PPT: Single Pay, Single Life. Receive Annuity Rs.89,496 per annum/
    ¹ ABSLI Guaranteed Annuity Plus, age 45 years, healthy male, Annuity Option:1-Life Annuity, Annual Payout Frequency: Annual, Policy Term: Whole Life, Single purchase price of Rs.7,29,600, you get annual annuity of Rs.55,837/-
    ² ABSLI Guaranteed Annuity Plus, Male age 60 years, Annuity Option -Life Annuity, Annuity Payout Frequency-Annual, Option chosen of Premium, Purchase Price Rs.10,00,000, Level Annuity, PPT: Single Pay, Single Life. Receive Annuity Rs.89,496 per annum/-
    ³ ABSLI Empower Pension Plan, age 40 year healthy male, Policy term is 10 years, Accumulation period is 10 years, basic premium is Rs.100000/-, Plan Option: Assured, Payment frequency: Annual, Return@8% fund value is Rs.13.57 lakhs and @4% is Rs.10,84,803/-
    ⁴ ABSLI Saral Pension Plan, Healthy male 40 years, Single Pay: Premium Paying Term, Annual Payout Frequency: Annual, Policy Term: Whole Life, Single Purchase Price Rs.2,50,000/-, You get annual annuity of Rs.13,809/-.
    ⁵ ABSLI Empower Pension SP Plan, age 40 years, Policy term 10 years, accumulation period 10 years, Single premium Rs.1,00,000/-, Fund Value: Rs.1,78,366/-@8% returns and Rs.1,20,988/- @4% returns
    ⁶ ABSLI Nishchit Pension Plan, Policy holder, aged 35 years, works in ABC Ltd invests Rs. 500,000 (excluding GST) in ABSLI Nishchit Pension Plan (Rs. 1,00,000 annually for 5 years). He chooses Vesting Age - 60 years, Policy Term - 25 years, Premium Paying Term - 5 years, Premium Payment Mode: Annual
    An extra premium may be charged as per our then existing underwriting guidelines for substandard lives, smokers or people having hazardous occupations etc.
    ABSLI Empower Pension Plan is an individual unit linked pension plan (UIN: 109L078V03).
    ABSLI Empower Pension Plan SP is a non-participating unit linked life insurance pension plan (UIN: 109L094V02).
    ABSLI Saral Pension Plan is a Non-Linked Non-Participating Single Premium Individual Immediate Annuity Plan (UIN: 109N130V01).
    ABSLI Guaranteed Annuity Plus Plan is a Non-Linked, Non-Participating, General Annuity Plan (UIN: 109N132V09).
    ABSLI Nishchit Pension Plan is a Non-Linked, Non-Participating Individual Pension Plan (UIN : 109N151V02)
    ADV/3/23-24/3789