Are you planning your retirement correctly?

Retirement Planning is not just about deciding how much to save. It is about checking whether the money and benefits you are building today can support the kind of life you want after you stop working. Your retirement income may come from multiple sources, such as EPF, NPS, gratuity, personal savings, investments, and retirement-focused Insurance Plans. The question is whether these sources are sufficient for your expected needs and whether they will provide the type of income you may need later.

With gratuity rules changing under the Labour Codes from 21 November 2025, and retirement products offering different ways to build benefits or generate income, it is useful to review your Retirement Plan periodically rather than simply continuing with the same approach.

How do you know whether your Retirement Plan is actually on track?

Start by looking at your Retirement Plan as a whole rather than focusing on one investment or one policy. Check these five things:

• When do you want to retire? Your retirement age determines how many working years you have left to build your retirement resources.
• How much may you need? Consider your expected expenses after retirement, including regular household expenses and healthcare needs.
• What do you already have? Review EPF, NPS, gratuity, savings, investments, and any existing pension or annuity benefits.
• Where will your retirement income come from? Identify which sources can provide a lumpsum and which can provide regular income.
• Is there a gap? Compare your expected retirement needs with the resources you are currently building.
  
  

You can also use the ABSLI Retirement Planning calculator to get an illustrative estimate based on factors such as your current age, retirement age, expenses, and assumptions about inflation and returns.

How do you know if your retirement income sources are sufficient?

Having several Retirement Savings Accounts does not necessarily mean that you have enough retirement income. Look at each source based on what it is expected to provide and when:

• EPF: Employee Provident Fund can form part of your retirement corpus through accumulated contributions and applicable interest.
• NPS: National Pension Scheme is a market-linked retirement savings system regulated by PFRDA. Its returns are not fixed and depend on the scheme and investment performance.
• Gratuity: A lumpsum employment benefit for eligible employees, subject to applicable rules. The Labour Ministry has clarified that gratuity under the Social Security Code applies to events occurring on or after 21 November 2025. (Labour Government of India)
• Personal savings and investments: Can provide additional resources for retirement and may serve different financial needs.
• Pension and annuity plans: Can be considered when you want to build retirement benefits or create a regular income stream, depending on the plan.
  
  

The important question is not simply “How much have I saved?” but “How much of my retirement requirement will these sources actually cover?”

Are you building a retirement corpus or planning for retirement income?

These are related but different parts of Retirement Planning. During your working years, the focus is generally on building resources for retirement. As you approach or enter retirement, the focus may shift towards using those resources to meet your income needs. For example, you may have accumulated money through EPF, NPS, gratuity and other savings.

You then need to decide how much should remain accessible, how much may be used for planned expenses, and whether part of your retirement resources should be structured to generate regular income. This is where pension and annuity solutions can become relevant.

What should you review before choosing a Pension Plan?

If you are considering a Pension Plan, look beyond the premium amount. Check:

• What retirement benefit the plan is designed to provide
• When the benefit becomes payable
• Premium payment term and policy term
• Whether the plan provides life cover
• What happens at the end of the policy term
• What benefits are available to the nominee
• The conditions applicable to the policy
• Whether the plan fits your existing retirement resources
  
  

If you are looking to build retirement benefits over the policy term, you can explore ABSLI Nishchit Pension Plan, which is designed to help build a guaranteed* retirement corpus along with a life cover component, subject to policy terms. But if you prefer a market-linked approach to building your retirement corpus and want to participate in market opportunities, you can explore ABSLI Smart Wealth Pension Plan, subject to investment risks and policy terms.

*Provided all due premiums are paid

When should you consider annuity as part of your Retirement Plan?

An annuity can be relevant when your priority shifts from building a retirement corpus to creating a regular retirement income stream. Before choosing an annuity, consider:

• When you want the income to start
• How long you want the income to continue
• Whether you want income for one life or two lives
• What you want to happen to the purchase amount after death
• Whether you want the purchase price to be returned to your nominee, where available
• How frequently you want to receive the income

If your priority is to create a regular income during retirement, you can explore ABSLI Guaranteed Annuity Plus, which offers multiple annuity options to suit different income needs, subject to the selected option and policy terms.

How should you review your Retirement Plan as you get closer to retirement?

Your retirement plan should change as your circumstances change. Review it when there is a significant change in:

• Your income
• Retirement age
• Monthly expenses
• Outstanding liabilities
• Existing retirement savings
• Expected retirement income
• Family responsibilities
• Healthcare requirements
  
  

For example, someone who is 10 years away from retirement may still be focused on building retirement resources, while someone approaching retirement may need to pay greater attention to how those resources will translate into regular income.

What mistakes can leave gaps in your Retirement Plan?

Even someone who has been saving for years can have gaps if the overall plan is not reviewed. Common gaps include:

• Saving without estimating future retirement expenses
• Treating the retirement corpus and retirement income as the same thing
• Depending on only one source of retirement income
• Not accounting for the timing of different retirement benefits
• Ignoring the financial needs of a spouse after retirement
• Not reviewing the plan when income or retirement goals change
• Choosing a pension or annuity product without understanding its payout structure and conditions

Also Read

• Know the Basics of Retirement and How to Plan for It
• How to Start Retirement Planning at 40
• What Are the Steps to Buy a Retirement Plan in India?
• Is Annuity the Right Option for Retirement?
• What Should You Do With Your Gratuity Money After Retirement?
  
  

References

• Ministry of Labour and Employment, Government of India, Additional FAQs on Labour Codes. (Labour Government of India)