Pension Plans
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Highlights Of Pension Plan
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Pension Plan - Everything you Need to Know
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Annuity is the payment that is received at regular intervals after retirement through your pension plan. It can be either received on a monthly, quarterly basis as well as on bi-annual or annual basis. There are different kinds of annuities available under a retirement plan, namely;
- Deferred Annuity
- Immediate Annuity
- Fixed Annuity and
- Lump Sum Annuity
For retirement, the minimum age of entry is 18 years, while 65 years is the maximum entry age of retirement for most such plans.
All pension plans have a minimum guarantee. This minimum guarantee is the guaranteed amount that the insured will surely receive at maturity or the end of the policy term.
The key features of a retirement plan are:
- They offer different types of annuities
- They help in investments
- They aid with compounding benefits
- They allow guaranteed income after retirement
- They allow tax benefits
The reasons to purchase a retirement plan are many, such as:
- It helps in accumulating a good amount of capital to make one financially independent after retirement.
- It helps one to enhance their corpus for the phase of life after retirement.
- It also allows death benefits to the nominee in case of the unfortunate death of the policyholder during policy tenure.
Depending on the plan, some retirement policies allow partial withdrawals of money after a certain period of time during the tenure of the policy.
The different factors to consider while purchasing a retirement policy are:
- The monthly expenses of the policyholder or how much money you think you would require per month.
- You have to check the inflation also
- Your life expectancy also has a role to play
- Besides, medical expenses and debts are also needed to be considered before buying a retirement plan.
To determine pension various things are considered such as the gender of the policyholder, savings amount, age of the policyholder as well as the chosen mode of annuity by the policyholder.
Different types of retirement plans are:
- Immediate annuity retirement plan
- Deferred annuity retirement plan, and
- NPS or National Pension Scheme
Yes, you can have multiple plans of retirement. You can invest in different plans as per your need. But, for NPS or National Pension Scheme only one plan is allowed per person. So, you cannot buy an NPS more than one time.