hat's too far. It's not the time to plan for my retirement." Because most of us believe in living life to the present.
But it is important that an individual has some kind of a retirement planning. For some it may be to have their own dream house, endless vacations and many more. This all can come true with proper retirement planning. Following are the tips on how you can retire rich
Chose the right product: Before selecting the right product it is always important to keep in consideration the cost, including charges for premium allocation, fund management, surrender, mortality, and fund switching. You could also be charged for a charged partial withdrawal, policy administration and revival.
For example in India basically there are two types of plans.
Pension plans: They provide low risk. Open pension funds support at least one pension plan with no restriction on membership while closed pension funds support only pension plans that are limited to certain employees.
The advantages of investing in this pension plan are:
If you invest up to Rs. 1 lakh in these plans, you are eligible for a deduction from your taxable income. Therefore the taxable income drops by Rs. 1 lakh making you pay lesser tax.
On retirement you could even withdraw some amount of from the fund as tax free and the rest goes into annuity plan. You could opt for monthly or quarterly income.
Unit linked plans: This involves a greater risk, depending on what you have chosen between equity, debt and cash. You could also switch funds across schemes based on your needs. But you can switch a capital gain tax and a transaction fee. You don't have to pay for entry loads.
Therefore select a plan that gives maximum maturity value.
Invest at an early age: Consider an example, Jyoti is 28 years old and plans to retire at the age 60. So therefore Jyoti has a total of 32 years for her retirement. Jyoti invests Rs. 1500 per month for the next 30 years at rate of 15 percent, she will receive a corpus of Rs. 1.03 Crore. Whereas If Jyoti would start investing at the age of 50, she would receive a Corpus of Rs. 1 Crore that will require a investment of Rs. 41,500 per month.
Hence it is always benefiting if you plan on investing at an early age because you have the time with you, you can gain advantage of high returns and maximize your investments by investing in stocks or Mutual Funds.
Invest in real estate: This investment is very profitable and you can grab a income from renting. Apart from the stocks and Mutual funds one can think of investing in real estate.
Have a retirement planning guide: You can approach a retirement guide who could advise you on sound investment portals based on your financial conditions.
Make more money: Why not earn more money rather than cutting down your expenses and compromising with your life? Have a second source of income that could help fund your retirement.