Retirement Planning – Essential for life after retirement

Are you worried about your future after retirement from a reputed job? Do you feel insecure about your future and are searching for the ways in which to enjoy a peaceful and pleasant life after retirement? Every employee and normal person is concerned about his or her future due to the present economical conditions. If you wish to have a great retirement, then you need to have a good plan ready. If you follow good Retirement Planning tips then you are sure to have good years with your family.

• Retirement Planning helps you to create wealth with small savings during your professional life in the form of a retirement plan.
• Plan for your retirement; is not as easy as just purchasing any plan and paying its premium without knowing the benefits you may accrue after retiring.
• A plan that helps you save now and build a corpus for the future, depending on the amount you feel would be enough to sustain the same lifestyle as today is a good retirement plan. In other words a plan that is able to replace your income from employment on retirement is known as a retirement plan. Such plans can be provided by your employer or the government or even insurance providers.

Need for retirement planning: Planning for life after retiring from work is very important. Most people tend to ignore this and believe that they will be able to survive on their meager savings after retirement with their children offering support. However, being financially secure makes sense in today’s scenario of high inflation, increase in everyday prices, and high cost of living. It would be prudent if you saved today so that you can meet any circumstances in future, knowing you have a backup plan.

Types of retirement planning: There are two types of Retirement Pension Plan. One is the defined contribution Plan and the other is the defined benefit plan.

• In defined contribution, the plan is to accumulate money from the contribution made by each employee. This plan is based on a percentage of the income contributed by the employee which is then placed or invested in a retirement plan by the employer on his or her behalf. Such income is exempt from taxes.
• In the defined benefit plan, the employer guarantees a certain sum to the employee on his retirement irrespective of how the investment fares in the market.

Benefits

• Easy to adjust to any costs and monetary wants post leaving work.
• Helps you avoid any major changes in your lifestyle after retirement.
• Such a plan helps you to give monetary security to the people dependent on you for any kind of economic maintenance.

[Source: https://insurancelifedotorg.wordpress.com/2014/10/27/retirement-planning-essential-for-life-after-retirement/]