Tips on how to make your retirement corpus last a lifetime

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Retirement in one of the important milestones in one’s career who look forward to spend quality time with their friends and family members. Gone are the days when the retiree depended on their children to take care of their retirement. In this time of nuclear family system, one has to fund their retirement and plan accordingly so that they can have an eventful second life.

However, in order to enjoy the retirement like people should pan their finances accordingly. In this article we would like to inform how to save the money and how that retirement corpus can last a lifetime.

Start early

There is no way one can delay the investments for retirement. One has to start investing early when they start doing a job or business. Investors can start by investing in multiple options like equity mutual funds, public provident fund, endowment insurance plans. Another important thing which investor should do during the working life is to take the term insurance plans. Having a term insurance plan of at least 10-15 times of the annual income will cover their life till retirement and can help family members in case of their death.

Have enough health cover

The urban health style has increased the probability of becoming sick which requires exclusive treatments. To overcome this challenge, one should opt to have a comprehensive health cover which can provide extra layer of protection one needs in such critical time. Even buying a health insurance plan is extremely beneficial when it comes to beating medical treatment inflation. Having a health insurance will protect your savings from sudden shocks of medical treatments. In this way, health insurance acts as a defensive cover for both savings and healthcare so that one can continue to enjoy their life.

Invest in Ulips and money back plan

We all are quite aware that in order to get the retirement corpus last lifetime one needs to have an exposure towards equity. What better way to invest in market through unit linked insurance plans (Ulips). Ulips offers investors with fulfilling their tax saving needs and can take care of inflation beating returns. Such funds are customizable according to the risk-taking ability of the investors. Policyholders can change the portfolio strategy, allocation, and even transfer funds to a different fund option within the ULIP, depending on the age or the market conditions.

During the early stage of the life, one should have aggressive exposure towards equity, but as soon as they near the maturity they can move the money to debt. This move will ensure that there is enough money in the hand of policyholders after he gets retired. Another important aspect is buying an money back plan when they reach say 50 or 55 years. This move will lead to policyholders getting money every year for the next 15-20 years which can take of their monthly expenses.

Buy an annuity

Everyone knows that stable source of income post retirement is very important to ensure financial stability. Annuities are an important retirement planning instrument that helps investors create a steady source of income post retirement.

After getting retirement investors can but annuities to get the regular pay out for your remaining life span.

Annuities can be of two types – immediate and deferred. In an immediate annuity plan, investors start receiving the regular income immediately after investing. They invest a lump sum amount and begin to receive the pay-out depending on the frequency chosen. This choice may be more appropriate if someone is nearing retirement and need an instant source of money.

In a deferred annuity plan, the regular income or annuity starts after a certain date. This is best suited for investors who are still few years away from retirement. But they can plan buying the deferred annuity, so that they start getting money once they reach at the age of 60.

Article by Mr. Rakesh Goyal, Director of Probus Insurance Broker.

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