We work hard while we’re in the workforce to ensure we get to build for our future and secure the lives of our loved ones. After our life in the workforce ends, we enter our golden years to relax and leave behind stressful routines and hectic workloads.
However, you may not be able to relax if you can’t deal with certain financial responsibilities that arise during your golden years. For instance, you may have to deal with medical expenses quite frequently. You can opt for the annuity pension plan to deal with these issues.
Purpose of Pension Plans
Pension plans are designed to offer you the dual benefit of wealth creation and insurance coverage under a single plan. By investing a specific amount towards your pension plan, you will gather a specific sum gradually. With a pension scheme in India, you can be at peace knowing that you will be financially stable once you have entered your golden years. Receiving a steady flow of income during your retirement can help you deal with medical expenses or any financial emergencies that you may face. If you opt for a suitable pension plan, you will also achieve your financial goals without any issues.
What Are the Advantages of Pension Plans?
Given below are some benefits of pension plans:
- Guaranteed income: You get a fixed and steady flow of income once you have retired from the workforce or immediately after you have invested based on the selected plan. With these plans, you get to stay financially stable even after leaving the workforce. This way, you can carry out your expenditures once your monthly income through your salary has stopped.
- Tax benefits: Most plans offer tax benefits specified under Section 80C of the Income Tax Act. Based on the tax rules, you will get tax benefits as per Section 80C, 80CCC, and 80CCD. The tax benefits offered through the plan can help you build for your future and lower the amount you spend on taxes.
- Wide range of plans: There are tons of plans offered in the market with unique features. When you select a pension plan, you get to select from a wide range of Investment options available for you. In addition, you can select a plan that matches your requirements with multiple options available. This way, you get to prepare for your retirement as per your needs and necessities.
For instance, if you select the Tata AIA pension plan, you get to increase the annuity amount with the help of top-up premiums.
- Protection from inflation: One of the advantages of investing in these plans from a young age is that it will help you protect yourself from the erosive effect of inflation. When you opt for a pension plan that offers you inflation-adjusted returns, you won’t have to worry about the rising prices in the economy.
- Your loved ones are protected: Even after you leave the workforce, you may have some family members who are dependent on you and who need your help. With a pension plan, you will be able to help your loved ones and provide them with the assistance they need. In addition, if you opt for a pension plan life insurance, your loved ones will receive financial help when you’re not around anymore. This way, your family’s financial stability is not affected if something happens to you.
Conclusion
Pension plans are optimal choices for individuals seeking financial protection for their golden years. These plans offer you insurance coverage for unprecedented dangers and help you build wealth simultaneously. With these plans, you get to earn inflation-adjusted returns. Along with this, you also get tax benefits through the plan. If you’re looking to purchase pension plans, you get the ability to select from a wide range of plans available for you.
