“Retirement is when you stop living at work, and start working at living.”
Early Planning for your Retirement is one of the wisest things to do. After all, you wouldn’t want to be dependent on anybody to meet your basic financial needs. Efficient planning at an early age can help you fulfill your dreams that you had possibly forgotten. For instance, you could go on a world tour with your significant other once you hang your boots. Or if you have kids who are dependent on you, a retirement corpus will come handy for their higher education or in prestigious events such as their marriage.
Saving money to fund a comfortable and worry-free retirement is perhaps the biggest reason people invest. Finding the perfect balance between risk and investment return is key to a successful retirement savings strategy.
What Is A Ulip?
A Unit Linked Insurance Plan is a mix of insurance and investment. When you invest in ULIP (Unit Linked Insurance Plan), the insurance company invests a part of the premium in shares/bonds, and the insurer utilises the balance amount in providing an insurance cover. Ulips meaning is to provide wealth creation along with an insurance cover where the insurer invests a portion of your money towards life insurance and the rest in a fund which matches your long term goals such as retirement planning.
Why should you consider Low Cost Ulips for Retirement?
You can invest in a ULIPs, which is a low-cost, long-term investment alternative to strengthen your retirement plans. It’s a type of a pension scheme that combines both insurance and investment. It’s a way to invest in market-linked pension products, which yield high returns.
Ulips offer higher returns on your investment, from which you can build a significant corpus by the time you retire, giving you the much needed financial support that one requires in their old age. Therefore, it is suggested to start planning and investing as early as possible, which will result in a considerable sum by the time you retire.
You are 30, and you decide to buy a ULIP. After a few years, your income has grown substantially, and you want to invest this surplus somewhere. So what’s better than adding it to your retirement corpus—an option only available in ULIPs. Unlike in the traditional pension plans, your insurers allow you to increase your investment in a ULIP pension plan, thus assuring you a higher return by the time you retire.
The premium payable on ULIPs is eligible for a tax deduction under Section 80C upto a maximum of Rs 1.5 lakhs in a financial year. Moreover, the amount you receive on maturity is tax exempt under Section 10(10D).
Under ULIPs, the key is always to keep the policy going for a longer time horizon to reap the best out of it. If your financial goal is wealth creation and you want to save funds for retirement, ULIP is one of the best options available.
Once you identify your financial goal and the type of ULIP that will help you achieve it, the next step would be to compare the ULIP products in the market. Look for comparison in the form of background expenses, premium payments and ULIP performance. Also, investigate the nature of funds that the ULIPs invest in to ascertain the returns from investments in the particular ULIP.
The lock-in period for ULIPs is five years. The long lock-in period ensures a significant corpus for your long term goals. ULIPs from reputable insurers such as Max Life Insurance provide various options for retirement that allow you to choose your premium amount based on your risk appetite.
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Knowing your post-retirement expenses is a crucial step in retirement planning. Some expenses such as clothing and entertainment usually go down, other such as medication and travel go up.
Therefore, it is essential to begin retirement planning, preferably the moment you start earning.