Till sometime back the only retirement plan that one had was being dependent on children. Times are changing now and the aged wish to remain independent and financially sound. Life of individuals after retirement is changing and so is the need for the retirement plan.
Pension plans allow individuals to plan systematically for their retirement. Such changing scenarios are making people look for options that allow regular income after they are retired. Pension plans offered by various insurance companies are filling this gap.
Reasons to buy a pension plan
1. Need for independence
Most people today value their independence and their children as well. After retirement, they wish to stay on their own terms. They wish to plan things so that they have an independent space and do not have to seek assistance from anyone.
2. Regular income after retirement
Regular income stops after retirement. One needs a regular source of income to sustain even with the basic needs and pension plans offer this source.
3. Maintain lifestyle
While in the job one gets used to a particular lifestyle and do not wish to forego that even after retirement. With limited or no income it becomes difficult. If you have taken steps to identify and buy a decent pension plan, maintaining lifestyles becomes easier.
The cost of living is increasing by the day. Even the basic necessities cost a lot. At this rate of inflation, it becomes imperative to have income other than the savings that you may have for your retirement years to meet the expenses and live comfortably.
5. Increased life expectancy
Due to enhanced medical facilities, available life expectancy is increasing. Considering the longer life after retirement, you need to plan for meeting the financial requirements.
6. Increasing medical costs
Medical costs have increased and will grow further. Your need for medical facilities will be more with growing age. You need to keep enough financial buffer and a source of income to be able to meet this. Regular pension income is major assistance.
7. Absence of social security norms
One of the major reasons that you may need a decent pension plan is that there is no other formal social security or income scheme available for most people in India after they retire. The government or employer offered pension is available to select few. You need to create this financial and social security for yourself.
Insecurities have caused people to seek pension. There is an added benefit with the pension plans as they have insurance factors attached to it giving a feel of all-around security. You can decide the amount of pension as well as the duration for which you wish to draw a pension.
Investing in a pension plan has been made rather simple. For planning retirement, you can invest small amounts regularly over a period of time and start getting the Annuity after that.
If you have already retired, even then you can take a pension plan. In this case, you pay a single lump sum Premium and buy annuities from it called the direct annuity plans. So it is never too late to plan for your retirement.