Aditya Birla Sun Life Insurance Company Limited

Retirement And Pension Policy

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

Multiple annuity options, Regular income stream.

Guaranteed# lifelong income

Top-up option for annuity

Single/Joint Life cover option

Deferred annuity option

Get Annual Annuity:

₹ 4.24 lakhs/-

Give:

₹1lakh/month for 5 years¹

ABSLI Saral Pension

Single premium. Guaranteed # regular income for lifetime

Financial Security for family

No medical tests

Single Life/Joint Life Annuity

Choice of multiple payout option

Get Annual Annuity:

₹13,809/-

Give:

₹2,50,000/-²

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

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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.

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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.

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Combat Inflation

The cost of living will only go up. Planning now means you’re preparing to meet those future costs head-on.

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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.

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Medical Emergencies

As we age, healthcare becomes a priority. A robust retirement plan covers medical expenses, keeping your savings intact.

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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

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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.

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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.

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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.

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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.

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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.

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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

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Estimate Required Savings

It helps you estimate how much you need to save to meet your retirement goals

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Account for Inflation

Calculators can adjust for inflation, giving you a realistic picture of future financial needs

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Plan Contributions

You can figure out how much you need to contribute monthly or annually to reach your desired retirement corpus.

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Impact of Returns

Allows you to see how different rates of return can affect your savings and the final corpus.

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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.
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Looking for Assistance?

Need help with your existing policy? Call us on our toll-free no. for quick response!

FAQs

A retirement or pension plan is a financial product designed to provide you with regular income or a lump sum after you retire. By contributing to a retirement plan during your working years, you create a fund that offers financial security and independence in your post-retirement years.

ABSLI offers a variety of retirement and pension plans, including:
Guaranteed # Income Plans for predictable payouts
Deferred Annuity Plans which allow you to accumulate a corpus and start receiving income at a future date
Immediate Annuity Plans that provide instant income after a single premium payment
Unit-Linked Pension Plans (ULPP) for those looking for growth through market-linked returns along with retirement benefits.

The “best” retirement plan depends on individual goals, risk tolerance, and income needs. Popular options include government-backed plans like NPS, PPF, and EPF, as well as insurance company pension plans like annuities. It’s ideal to compare features, flexibility, and tax benefits* to select a plan aligned with your financial needs.

Consider your retirement goals, risk tolerance, desired payout structure, and age when selecting a retirement plan. Using a retirement calculator can also help determine the right contribution level and investment type for your specific needs.

Many retirement plans offer tax benefits* under Section 80C of the Income Tax Act, allowing deductions on contributions. Some plans also offer tax-free returns under Section 10(10D)**, making them advantageous for tax-saving as well as retirement income.

Starting early allows you to make smaller contributions that compound over time, building a larger retirement fund. Begin by setting retirement goals, estimating expenses, and choosing a plan that suits your current budget and long-term needs.

In most cases, changes to the retirement plan, such as adjusting premium amounts or payout options, cannot be made post-retirement. However, you may still update details like nominee information.

Estimate your retirement income by evaluating your desired lifestyle, projected expenses, inflation, and any anticipated medical costs. Financial advisors recommend planning for about 70-80% of your pre-retirement income.

To surrender your ABSLI retirement plan, you must contact the ABSLI branch or customer service and follow the surrender process, which includes submitting relevant documents and may involve surrender charges depending on the plan terms.

To nominate or change a nominee, contact ABSLI customer service or visit a branch. You’ll need to complete a nomination form and provide the required identification documents.

The vesting age is the age at which you start receiving benefits from the retirement plan. In ABSLI plans, this age typically ranges from 50 to 60 years, depending on the specific plan chosen.

The free-look period is the time (usually 15-30 days) after purchase during which you can review the policy terms and cancel if unsatisfied. ABSLI refunds the premium minus any applicable charges.

Some ABSLI retirement plans may allow loans against the policy after a specific duration. Check the terms of your plan or consult an ABSLI advisor for details on loan eligibility.

ABSLI offers various annuity options, including Lifetime Income, Joint Life Income, and Lifetime Income with Return of Purchase Price. Each option provides different payout structures to suit personal retirement needs.

Annuity rates are determined by factors such as the plan type, purchase price, and market conditions. Higher contributions typically result in higher annuity rates and larger payouts.

Transferring an existing retirement plan from another provider to ABSLI may not be possible directly. However, consult ABSLI to explore alternative solutions, like opening a new plan or customising options to suit your current needs.

In some ABSLI plans, you can increase your premium or contributions to build a larger retirement corpus. Consult your policy terms or speak with an advisor to check if this option is available.

Once you reach the vesting age, you can initiate pension payments by selecting a preferred payout mode. Contact ABSLI customer service to set up your pension distribution.

If your ABSLI plan is unit-linked, you may have the flexibility to change fund allocation based on market performance and risk preferences.

You can track the performance of your ABSLI plan through online account access or by visiting your local branch for regular updates on fund performance and returns.

If you pass away before retirement, your nominee will receive the death benefit, which may include the fund value or a predetermined amount, depending on the plan.

Partial withdrawals may be allowed in some ABSLI plans after a certain period. Refer to your plan details or contact an advisor to understand withdrawal options.

If premium payments are discontinued, the plan may lapse or convert to a paid-up policy with reduced benefits. ABSLI can provide specific details based on your plan.

Yes, with ULPP plans, ABSLI often allows you to switch between investment funds to suit your risk appetite and market conditions.

It’s advised to invest around 10-15% of your income towards retirement savings. Using a retirement calculator and consulting with an advisor can help determine an amount that aligns with your long-term goals.

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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.
    ~ Loyalty Addition added at the end of the Policy Term to further boost your retirement corpus, provided all due premiums paid.
    ¹ Annuitant -Health Male: Age 45 years invests in ABSLI Guaranteed Annuity Plus | Annuity Option: Deferred Life Annuity with Return of Premium | Premium payment term – Limited pay (5 years) | Purchase Price: Rs. 1,00,000/ month excluding modal loading for 5 years | Deferment period: 5 years Annuity Pay-out Frequency: Annual | Single life. Get Rs 4,24,132/- (Exclusive of taxes) every year till annuitant is alive
    ² 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/-.

³ 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 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: 109N132V11).
ABSLI Nishchit Pension Plan is a Non-Linked, Non-Participating Individual Pension Plan (UIN : 109N151V02)
ADV/9/24-25/1619/9/24-25/1638

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