Retirement

Non Resident Indians (NRIs) all over the globe find the subject of retirement intriguing. Some look at it as an avenue to travel the world and do things that they couldn’t while they were working, while some look at it as a peaceful time waiting for them to be enjoyed with family cherishing the life they’ve spent. All of this, at a place rather full of content and happiness. Therefore, NRIs often invest in a plethora of Retirement/Pension Plans to help them with their plans and responsibilities such as child’s marriage, education etc. Let’s check out the various types of Retirement Plans for NRIs.

 

Types of Retirement or Pension Plans in India for NRIs

Retirement Plans in India cater to the needs of a wide range of insurance seekers. These Pension Plans are available in the market with multiple classifications, plan structures and benefits. The entirety of these plans can be simply divided into 11 categories:

Retirement/Pension Plans

Highlights

Deferred Annuity

-Regular/Single Premium over a policy term;

-life coverTax Exemption (one-third of the corpus)

Immediate Annuity

-Lump Sum payment; no life cover

-Immediate pension provided

-Premiums are exempt from tax

Annuity Certain

-Annuity paid for a specific number of years

-Period can be chosen; benefit paid to beneficiary in case of death

With and Without Cover Pension Plans

-With Cover: Has life cover included in policy; although not a very high amount

-Without Cover: No life cover; only corpus paid to nominee

Guaranteed Period Annuity

-Annuity provided for certain periods (5, 10, 15 & 20 years) irrespective of whether he/she survives the period or not

Life Annuity

-Pension paid until death

-Post death the amount given to spouse, if “with spouse” option chosen while taking policy 

National Pension Scheme (NPS)

-Scheme by Government of India

-Money invested in equity and debt funds as per the preference of the individual

-Can withdraw 60% amount at retirement. 40% used to purchase annuity

-Maturity proceeds aren’t tax-free

Pension Funds

-Managed by only 6 companies allowed by government

-Comparative better returns on maturity; long period policy

Whole Life ULIPs

-Money invested for whole life

-Partial withdrawals post retirement; tax free income

-Additional withdrawals allowed

Defined Benefit

-Based on your earnings and the no. of years served under your employer

-Both you and your employer can contribute

-ensures that you pay a specific amount from the retirement income for life

Defined Contribution

-Retirement income not guaranteed but contributions are

-The sum accessible for your retirement relies upon the all-out contributions made to your record and the investment returns this cash earned

-At retirement, you utilize the cash in your record to produce a retirement remuneration

Financial Planning for Retirement

There are 3 fundamentals of Financial Planning:

 

  • Emergency Fund: Must be 3 times of your salary
  • Health Insurance: Necessary to tackle health emergencies
  • Investments: To create a corpus

 

Being an NRI, one must consider the above-mentioned aspects of Financial Planning. Living a life after retirement with the preferable standard of living requires frequent investments for the very purpose. A planned financial approach will award a satisfactory and enlivening life post retirement. For financial advisory, write to us at [email protected].

 

NRI Retirement: The Need of Planning

Taking into account the necessities of people and the effect of inflation on the finances, NRIs must address the indispensability of retirement plans. 

 

Introspect upon how much time is left till you retire and start planning it efficiently and consider investing in a pension plan to ensure a satisfactory life after you retire. The world is pacing ahead. You can access everything at your fingertips. It is recommended that you stress on the three pillars of financial planning and get a well suited plan for yourself. With easy online processes, getting a good plan has simplified itself.

 

Envision your requirements and opt for the best suitable plan as per your needs for a happy life after you retire.

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