Mr Kumar had been a very successful advertising executive. He earned well, took
care of his family and had a comfortable life. But after his retirement he realised
he hadn't accounted for the inflation while saving in his retirement plans. His
retirement funds soon depleted and he and his elderly wife were literally left without
any money. They were then forced to move in with their son, something they never
intended to do.
To avoid being in a situation similar to Mr Kumar's, you must handle your retirement
investments smartly. Take a look at this article to know what your options are.
Making a budget
Before you look at the retirement plan investments, it is very important for you
to make a budget for your retirement. Take all the factors such as your lifestyle
expenses, your monthly financial liabilities (paying rent, paying for the education
costs of a minor child, etc), and your medical expenses into account. And don't
forget to take the inflation into consideration too. Calculating the figures will
give you a rough idea about the kind of investments you need to make for your retirement.
There is a special kind of life insurance that helps you handle your retirement
investments smartly. The retirement plans are tailor made for your retirement days.
These plans help you invest over a period of time while you still work and then
pay you out when your regular income stops. Let us take a detailed look at the retirement
Understanding a retirement plan
Retirement plans have two variants-immediate annuity plans and deferred annuity
plans. The deferred annuity plans allow you to invest for a long time. You can take
a deferred annuity plan in your 30s or 40s and start investing. The money that accumulates
gets locked in a retirement fund. The plan matures when you retire. You then have
the option of getting the entire maturity benefit in one go or you can have it broken
up in instalments. The latter would provide you with a steady income after your
monthly salary stops.
The immediate annuity plans allow you to lock in a large sum of money (your retirement
benefit, savings, etc) into a retirement fund. The plans will then make monthly
payments to you and provide you with a continued income even after your retirement.
Both these types of retirement plans are very useful and you must start investing
at the earliest. These are also life insurance plans that offer a death benefit
to your nominee if you die within the policy period.
There is no alternative to saving for your retirement. After working and staying
independent your entire working life, you surely would not like to depend on your
relatives or children during your retirement days. So make some smart investments
in retirement plans and ensure you have a secured financial future ahead of you.
Explore the various retirement investment options. Buy a good retirement plan and
make some other investments too. The right savings done today can smooth out your
retired life considerably tomorrow.