Retirement Insurance Company

5 Steps to Launch Your Own Retirement Plan

A critical aspect of a retirement plan is how and where to invest. The assets you choose to invest will vary depending on several factors, which include your risk tolerance and investment time horizon. These two factors function hand-in-hand. The more years you have left until retirement, you can opt for higher amount of risk.

If you are venturing into the retirement game late, i.e. after 45 years, majority of regular savings should be invested in government securities and exposure to equity should be limited. If you start reasonably early (in your 30s) or you expect to have your substantial company pension waiting for you, then you can take up higher investment risks that will grant you the opportunity to earn higher returns. Along with right asset allocation it is also important to diversify your portfolio. As rightly said, “Do not put all of your eggs in one basket.”

The closer you get to retirement, the less tolerance you'll have for risk and the more concerned you'll be of keeping your principal safe. Once you reach your target retirement age, you must shift your corpus toward income-generating securities.

Pension and Annuity

A combination of pension and annuity plans offered by life insurance companies is a good investment avenue for a secure retirement. Retirement Plans help build a retirement corpus. These plans also have assured benefit on death of the insured. The unique feature that distinguishes it from any other insurance plan is that on maturity, two third of the corpus is mandated by current regulation to be reinvested for generating a regular income stream, which is referred to as Annuity. The remaining one third can be taken as tax free lump sum. An Annuity is an insurance product that pays out income and is a popular choice for investors who want to receive a steady income stream post retirement.

Once you invest in an Annuity, it generates payments to you on regular intervals. The income you receive from an Annuity can vary from monthly, quarterly, annually or even in a lump sum payment. You can opt to receive payments for the rest of your life, or for a set number of years. You can also receive your invested corpus back or increase your Annuity every year. You can continue to receive the regular payments (by your spouse) after you. Annuity offers a wide range of options, which can be opted by an individual as per his/her requirement.

To sum up, below are the key steps to kick start your own pension fund:

1.       Establish how much you would need for yourself and your partner after retirement. Don’t forget to consider inflation and expenses.

2.       Estimate the time horizon you have for retirement. Keep in mind the longer investment horizon gives better corpus.

3.       Learn about your employer’s pension plan so that you can plan for the gap in corpus.

4.       Select the investment avenues that suits best your risk and return appetite. As much as possible, research and read on the best plans available in the market.

5.       Review the plan regularly, at least every year, until your retirement age.

There are many online tools and guides that can help in devising your retirement plan. However, it’s always advisable to take guidance of a financial planner for expert view on your plan. After all, it’s not when you retire, but to what lifestyle and income you retire.

Pension Plans How Much Would You Need Post Retirement

They say “life is a meal and retirement is the dessert.” This is the time you are to toss aside all of your life’s mundane worries and responsibilities as you embrace your post-retirement heydays. Many people believe that life begins after retirement, deeming it as the golden age of life.

Well, retirement does leave you with ample of time to pursue your hobbies, engage in recreational activities, or realize that long-standing dream of travelling the world. However, knowing that you will not have your day job any longer, you are going to be deprived of your regular source of income. Sufficient funds are necessary to enjoy the post-retirement years in comfort and leisure. For that purpose, it is necessary to take prudent investment decisions during your working days.

Retirement planning through investment in pension plans helps to maintain financial security once your regular income (through day job) starts to ebb. Life insurers such as MaxLife provide pension plans that offer combined advantage of maturity as well as death benefits, thereby securing the financial future of your loved ones and you post-retirement.

Choosing the right kind of pension plan to avail an uninterrupted source of income even after retirement can be exhausting. You are required to do extensive research for choosing the right scheme, zeroing down on the exact premium amount, planning the pay-out interval, and other investment-related information for getting adequate pension to make ends meet even after retirement.

Though many of you may be able to select the best pension plan, zeroing down on the pension pay-out is yet a taxing issue that involves financial expertise and professional aid. To simplify this, we have provided tips to calculate the approximate amount of funds you will require post-retirement.

1.       Determine the Basic Living Expenses:

The pension received should be sufficient to cover the basic expenses of living each month after retirement. Your future expenses can be determined by assessing the extent of current expenses. To get the exact figure, you should take into consideration housing costs, utility payments (such as water, electricity, and gas), food and clothing expenditure, transportation cost, and other sundry expenses that might incur after retiring.

2.       Take Inflation into account

Inflation will creep in with years and make goods and services dearer, raising the cost of living each year. The current inflation rate in India is around 4%; it will rise every year. In accordance to the inflation rate, the pension pay-out should rise. Otherwise, the received amount will not be sufficient to meet expenses, thereby forcing you to seek financial aid when you are not working anymore.

3.       Plan for Health Insurance

Healthcare costs are rising at an alarming rate. To avoid the impact of such unexpected medical expenses on your monthly budget post-retirement, it is recommended to avail a health insurance plan during your working years. Retirement Insurance Policy will provide financial safeguard against uncalled medical expenses, thereby not putting a load on your regular expenditure budget after you retire. Avail a health insurance plan for both you and your spouse (or any other dependants in the family) to prevent such untoward eventualities.

4.       Consider Recreation costs

Be it a short trip to your native place or a longing pursuit of old interest, retirees often find themselves tempted to engage in travel or hobbies to pass their free time. However, all these perks come at a cost, which needs to be settled from the pension amount itself. To cover such costs effectively, you should meticulously set aside some amount from your pension.

These tips will help you get a grasp of the right pension amount required to enjoy the post-retirement years comfortably. Choose a pension plan wisely after carefully perusing it and secure your old age today.

Five Retirement Planning Mistakes That You Should Avoid

Retirement is deemed to be the 'golden period’ of one’s life. With no deadlines to worry about and no work pressure to endure, days are idyllic and to be spent in leisurely activities, revelling in your favourite pastimes or pursuing your long-standing dreams and hobbies.

Retirement will relieve you of your duties, giving you that freedom to do whatever you always wished for. However, it will also deprive you of your regular source of income. So how will you manage to enjoy post-retirement lifestyle without having sufficient amounts of fund in your bank account?

Making ends meet post-retirement is certainly far from being the ideal thing to happen. Unfortunately, this could the saddening reality if you remain improvident and fail to do the proper retirement planning and investments beforehand. Today, several insurance companies, such as MaxLife, have come up with retirement savings plans that secure your post-retirement age as well as offer financial security to your loved ones. These plans not only provide you regular pay-outs in the form of pension in the post-retirement age but also offer maturity benefits in the form of lump-sum amount, which you can later use to your long-standing plans such as world travel, financing a second home, etc., post-retirement.

Naturally, being wise with your finances is the most important plan of your life. Improper planning can leave you with insufficient funds, thereby forcing you to seek monetary help, or worse, sell your existing assets. Mentioned here are a few mistakes which individuals often make, which you can avoid, while doing retirement planning.

1.       Not Assessing the Cost of Living Properly

The first question that really matters while retirement planning is “How much funds are needed to sustain my current lifestyle?” Many people are unaware of the exact figure and often end up choosing an amount that is too high or too low. The greater the amount you plan to invest, the higher will be its toll on your monthly budget, whereas a lower investment amount might leave you to cut corners at that age, depending on your lifestyle. In addition, the factor of inflation will affect the cost of living, thereby forcing you to spend more in future. Take into consideration all these factors while assessing your cost of living.

2.       Not Planning for Healthcare

In today’s fast-paced life, keeping good health is often a tedious task. With numerous ailments and medical conditions that come with the old age, treatment costs will burn a hole in your pocket, forcing you to break your savings early or avail monetary help around. To avoid such circumstances, it is recommended to avail a health insurance plan that will take care of uncalled medical expenses and hospitalization during your old age.

3.       Not Allowing Investments to Grow

Several individuals plan for retirement at a very late stage in life, thereby getting only a few years for their investments to mature. Similarly, individuals do have the habit of breaking down investments to overcome financial difficulties or emergencies. To get the expected returns on your investments, it is recommended not to do partial or complete withdrawal before the maturity date, thereby helping you get the best returns.

4.       Not Diversifying your Investment Portfolio

More often than not, people tend to invest in a single investment product, neglecting the possibilities of higher returns that could be availed by investing in different plans. There are a gamut of products such as savings plans, fixed income plans, whole life plans, mutual funds, and a mix of aggressive as well as conservative investment instruments that offered substantial capital, thereby helping you gather sufficient funds during the post-retirement period.

5.       Not sorting your debts

Long-term debts such as home loans, property loans, vehicle loans, and payment of monthly EMIs for various long- and short-term investment goals linked with child education, marriage, buying second home, etc., will take a major chunk from your monthly income. Now imagine such debts continuing even after you retire. Such payments will put a heavy toll on your financial health after retirement. To avoid such scenarios, make sure that you take care of all your debts before the age of retirement.

These are five common mistakes that individuals make while planning for the retirement. Avoid them and secure your future financially today by investing right in a Retirement Insurance Company.

Be Financially Secure In your Old Age

The theory of evolution revolves around the cycle which consists   of various stages of life. Right from the initial stage of childhood to the last leg of old age; people tend to complete a full cycle of life. Childhood is considered to be the most carefree years of life where all your needs are catered by your family. It’s a stage of life when a person is completely dependent on others even for routine work. The next phase is the adolescent stage of life where a person pursues education and aspires to be successful in life. Then comes the final stage of life which is the old age. Old age usually tends to weaken the health and drop regular energy levels of a human. Often people tend to worry about their old age a lot. Trying to figure out their way through the old age phase, both physically and financially. If you are one of them, who usually gets worried about your old age, here is your getaway.

Invest well for your future. If you want to know how? This is your answer. Invest in Retirement Plans for a much secure future. While in your professional employment, you can invest for a longer goal. Pension plans benefits are intangible and provided when you need them the most i.e. after your retirement. Pension plans are simply an investment which you make through payment of fixed amount of money on fixed amount of time. These monetary transactions are known as premiums and the benefits are provided after the maturity of the policy. Best pension plans provided by insurance providers have drafted to provide maximum benefits with minimal amount of cost.

Pension plans are not just investments for the future but also a way to be financial independent at an age which demands dependency. In order to opt for the best insurance policy its important you have a detailed data of various plans available in the market. This can be done by comparing insurance plans online. Compare best pension plans in India using various insurance comparing websites such as policy.com. PolicyX.com not only provides you the detailed information about a particular pension plan but also helps in brief pension plans comparison. Comparing Pension plans online helps in providing the right direction in taking a financial investment decision. We believe when it comes to investments, think and think hard.

Source:  http://www.policyx.com/blogs/be-financially-secure-in-your-old-age/

5 Year-End Retirement Planning Strategies

There's talk of New Year's resolutions abound. But you don't have to wait until January to get started on organizing your finances. Ending the year on a strong financial note will give you a solid base to begin working toward your money goals in the New Year. Instead of having to get organized and begin creating a plan, you'll already have one in place and know where you stand. This makes it easier to pursue your goals and make the small adjustments that are necessary, but not alter your whole financial life. Here are five ways to get your retirement planning on track before December 31:

1. Review your investments. If you haven't looked at your accounts in the past six months, now is the time to check in on allocations, investment performance and contribution rates. Is there room to save more? You might need to make changes to your portfolio to get funds back in line with your intended allocation. Your 401(k) plan may have removed funds from its offerings. Review where your money is currently sitting and make any necessary adjustments before the end of the year.

2. Create a plan for extra cash. If you work for a company that hands out bonuses or anticipate coming into some cash before the end of the year, have a plan in place for how you'll allocate it before you receive it. This will prevent you from spending it in small priority areas. Consider following a 50 / 30 / 20 rule that will have you put 50 percent toward debt, 30 percent toward Retirement Plans and 20 percent toward a personal splurge.

3. Know where your money is going. The holidays are a time that can wreak havoc on your spending plan. Take an hour or so to review your cash flow. See if you will be able to max out contributions to your retirement account this year. If you received a raise or income increase, but didn't increase your retirement contributions at the same time, now is the time to figure out where that extra money is being spent. Target areas where you can make small adjustments to your spending in order to stash away an extra $100 per month.

4. Create SMART goals for the year ahead. It's one thing to say you want to save for retirement in the New Year. It's another to get into details. Heading into the New Year with a retirement savings goal that is specific, measurable, attainable, relevant and timely will help you to stay invested in your progress. Perhaps you are hoping to save $5,500 in a Roth IRA by next June or want to max out your 401(k) at $18,000 by December 31, 2016. Break those goals down into monthly savings targets to track progress and celebrate your wins along the way.

5. Keep your fear of missing out in check. Fear of missing out is a real concern in our lives. We see our 500 closest Facebook friends getting new cars, taking tropical vacations, sporting the latest fashions and more, which makes it easy to believe that we want and need those things as well. We're getting hit with advertisements and we're not even watching television. It's important to be clear on your goals and what purpose money is playing in your life. You want to use money to make you happy. Being clear on your wants and desires and not being influenced by others will help to minimize impulse spending and purchases that can derail your budget and take away from longer term savings plans. Make sure you're clear on what you desire and put your money toward chasing your dreams, not someone else's.