Retirement plans in India usually have only 3 objectives: House, vehicle and a regular pension. Once these are met, you believe you won’t need more in your retirement. But you are so wrong!
What about your medical bills? What if you wanted to travel somewhere? What if you were to entertain guests? What if your near and dear ones required financial help? You never thought about allocating money for all these, did you?
But now when you begin thinking along these lines, does your retirement plan generate enough to meet all these possible future expenses? Take out your calculator and follow these steps, noting down the figures in a notepad:
• Whether as regular investments, or a lump sum, what is the total amount that you would have deposited before you start withdrawing pension?
• What is the rate of interest your investment will be earning?
• What are the total taxes and charges you will be liable to pay when you begin withdrawing pension? Also check whether there are any obligations - how much you can withdraw, where you must reinvest, and so on.
Now calculate the actual return on your investment. Are you happy with the figure? Compare the pension plan with investing for the same duration in other financial products such as mutual funds, PPF, gold, real estate etc.
Unless the investment takes care of all your retirement needs, you won’t be happy in old age. So calculate well, and choose wisely.
What about your medical bills? What if you wanted to travel somewhere? What if you were to entertain guests? What if your near and dear ones required financial help? You never thought about allocating money for all these, did you?
But now when you begin thinking along these lines, does your retirement plan generate enough to meet all these possible future expenses? Take out your calculator and follow these steps, noting down the figures in a notepad:
• Whether as regular investments, or a lump sum, what is the total amount that you would have deposited before you start withdrawing pension?
• What is the rate of interest your investment will be earning?
• What are the total taxes and charges you will be liable to pay when you begin withdrawing pension? Also check whether there are any obligations - how much you can withdraw, where you must reinvest, and so on.
Now calculate the actual return on your investment. Are you happy with the figure? Compare the pension plan with investing for the same duration in other financial products such as mutual funds, PPF, gold, real estate etc.
Unless the investment takes care of all your retirement needs, you won’t be happy in old age. So calculate well, and choose wisely.
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