Steps for effective Retirement Planning

Continuing the Knowledge Series- Today we are going to cover the Topic on Retirement Planning and the points needs to be followed while doing so.


Today’s Topic: Importance and Steps for effective Retirement Planning


It is often said that life begins at 60. Usually at this age, people retire and pursue their long-cherished dreams. However, the phase of retirement also means that the flow of income would be dried although the expenses would still continue.


India is a nation of big and joint families, where younger generation used to lookout elderly people. However, with the large-scale urbanisation, the families have started to shrink and nuclear families are on the rise. In light of this, it cannot be stressed enough that appropriate retirement planning is imperative in today’s unpredictable world. Retirement plans are referred to as pension plans. The main objective behind a retirement plan is to have a regular income stream post-retirement. Given the ever-growing inflation, investing in these plans has become paramount and a pre-requisite to sustain retirement.


Hence, even before you retire, you need meticulous planning to reduce your taxability. It will help you live comfortably with incomes that do not fall into the higher tax slabs/taxed. Here are some strategies you can follow to reduce the taxes on your retirement incomes.


An investor may choose any retirement plan basis his/her requirement and preference; however, the following key factors merit consideration:

  • Inflation

The long-term investment must guarantee a positive return post inflation. Thus, if the investment in a pension fund gives a return of less than or equal to 5%, it will not be a viable option for planning retirement.

  • Adequate Coverage

While choosing a retirement pension plan, one must ensure to receive adequate pension income post-retirement which should be sufficient to meet the expenses as well as a backup for emergency requirements.

  • Assured Return and Low Risk

The investor may not prefer to seek more risks at the time of retirement. Thus, it is important to stick to guaranteed return on investments and further, the investments should reflect the low-risk corpus to fight the increasing market volatility.

  • Regular Flow of Income

Another pertinent consideration is the amount of annuity offered. There are various retirement pension plans which differ in terms of annuity offered. Some plans may provide annuity payment only for a certain period post-retirement and some may ensure the regular pay-out till the death of the person. There are plans which assure the annuity to the nominees even after the demise of the assured person.

  • Diversification

“Never to keep all your eggs in one basket” is the fundamental principal of investments. Hence, before zeroing in on any plan, it is pertinent to check how diversified the investment is. Additionally, if it is possible, one can opt for more than one pension plan. A well-diversified retirement fund will ensure that the corpus is least affected during any unforeseen economic event in future.

  • Taxes

Taxes are probably the most important factor to consider while choosing a retirement plan. We should look for those options where Tax liability is min or zero. The taxation aspect shall differ based on the type of pension plans and the risk appetite of the investor.


Find below the comparison of the best Tax Free Guaranteed options available in the market, for Retirement Planning.



Product name Plan Name Annual Premium PPT Total lnvestment Sum Assured Applicability Income Benefit Gauranteed Non Guaranteed lnc Income Starting year Guaranteed Inc Year(expandable to 30years) Total Gauranteed Income benefit
Guaranteed Maturity Benefit Total Maturity Benefit Return Multiplier IRR(in %)
BAJAJ Assured Wealth Goal Long Term Inc 100000 10 1000000 1150000 Whole Policy Term 98500 NA 12 25 2462500 1000000 3462500 3.46 6.00
HDFC Sanchay Plus Long Term Inc 1000000 1184500 Onty till first 11years 100683 NA 12 25 2517075 1000000 3517075 3.52 6.00
ICICI GIFT Long Term Inc 1000000 1000000 Whole Policy Term 93645 NA 12 25 2341125 1100000 3441125 3.44 6.00


Let me know, in case any clarity is required.


The time to repair the roof is when the sun is shining” – John F. Kennedy



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