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Can you live on your pension alone?


Your pension may be woefully inadequate in times of high expenses and inflation. There are better avenues to explore if you wish to have a peaceful retirement.

'Retirement'. The word exudes a magical aura. It conjures up pictures of a person sitting peacefully in a rocking chair with a cup of coffee and a book. Or of a senior citizen couple gardening or going out for a walk. Whatever the image that the word 'retirement' conjures up in your mind, it is sure to induce feelings of pleasure and anticipation alongside.

But there is another term that comes up when one talks about retirement – pension. A retired person does not make a regular income, and hence, subsists on a pension. This pension is granted per month in lieu of living expenses for the person. In previous years, the pension was often sufficient to safeguard the interests of the retiree. However, in today's times of inflation and high living costs, one's pension may not last even for two weeks of the month.

Senior citizens do not receive a regular income post-retirement, but their expenses go on unabated. There are medicines to purchase, utility bills to pay, travel and grocery shopping, etc. A pension alone cannot suffice to finance all these expenses. The retiree needs other options for a worry-free retirement, and the time to start exploring and investing in these options is now:

Pension plans
These are plans that help the retired person live a financially independent life. retirement pension plan are policies that return the investment made with interest after retirement. The person can use the corpus accrued in the plan to pay for all expense heads, big or small.
 
PPF:
The Public Provident Fund provides a large corpus of money after maturity. It has a lock-in period of 15 years and one may invest as little as Rs 500 and as much as Rs 1, 00,000 in it per year. One may partially withdraw funds against the collected investment after seven years are complete. On maturity, the investment pays off handsomely and helps create a large retirement fund.
 
ULIPs:
Employed persons thinking of planning their retirement should invest in Unit Linked Insurance Plans that offer steady and bankable returns over the long run. ULIPs are affordable investment instruments and offer relatively low risk on the market.
 
Savings schemes:
Several banks and financial institutions today offer excellent products in the savings sector. These savings schemes help inculcate the habit of regular savings over the long run, thus creating a large retirement fund for the future. It is also possible to get a periodic income from the investment made so as to create a second income stream for the policy holder.