Pension during your old age. These policies are most suited for senior citizens and those planning a secure future, so that you never give up on the best things in life.
Pension plans or retirement plans offer you the dual benefits of investment and insurance cover. It is nothing but investing a certain amount regularly to accumulate over a specific tenure in a phase-by-phase manner. This will ensure a steady flow of monthly pension once you retire. Provident Fund, for example, is a popular retirement planning scheme.
If you begin contributing early, it will build towards a secure golden year money-wise. A well-chosen retirement plan can help you rise above inflation, thanks to the power of compounding. The corpus (investment+gains) in your name by the retiring age can take care of increasing healthcare costs and lifestyle requirements.
Who should opt for Pension Plans?
Anybody who wants to secure their retired life financially should start investing in pension funds. Section 80C also allows a number of retirement plans for tax deduction up to Rs. 1.5 lakhs. Any fund you choose must align with your investment goals (or retirement plans). For instance, if you wish to retire early, your corpus upon maturity should be enough to support the additional years. So, the key is to scheme smartly. Then you will be able to enjoy 2-in-1 benefits of building wealth while saving on income tax.