Retirement planning means preparing today for your future life so that you continue to meet all your goals and dreams independently. This includes setting your retirement goals, estimating the amount of money you will need, and investing to grow your retirement savings.
You can start at any time, but it works best if you factor it into your financial planning as early as possible. That’s the best way to ensure a safe, secure—and fun—retirement. The fun part is why it makes sense to pay attention to the serious and perhaps boring part: planning how you’ll get there.
Advantages of retirement plans
Below are the advantages of a retirement plan:
Returns for life
Retirement plans such as annuity plans provide you returns for life. You may choose to invest regularly or as a lump sum and stay financially independent for your entire life.
Regular income after retirement
A retirement plan helps you create a regular flow of income after retirement. Retirement plans offer a fixed income which substitutes for your pre-retirement salary. You can use this money to cover your daily expenses, such as groceries, fuel, electricity, and more. You can also meet your post-retirement goals, such as traveling, pursuing a hobby, starting a new venture, and more.
Tax2 benefits
A retirement plan provides you with tax2 benefits. You can claim a deduction of up to ₹ 1.5 lakh for the premiums paid towards the plan under Section 80C2 of the Income Tax Act, 1961. So, you can save for your future needs as well as lower your taxes.
Steps to Retirement Planning
1.Decide how much you’ll set aside each month. Using automatic deductions takes away the guesswork, keeps you on track, and takes away the temptation to stop or forget depositing money on your own.
2Choose the right accounts for you. Take the chance to invest in a 401(k) or similar account if your employer offers that option.
3. Check on your investments from time to time and make periodic adjustments.
