SECURE RETIREMENT WITH GUARANTEED INCOME PLANS! MAXIMUM TAX-BENEFITS BEFORE 31ST MARCH 2023.
What is Retirement?
Retirement is the phase of life where an individual ceases employment or business activities and typically relies on retirement savings, investments, pensions, or Social Security benefits for income.
It is called the golden period of life because it is often seen as a time when individuals have more freedom, independence, and time to pursue their interests, hobbies, and travel aspirations. An individual in Retirement, free from the usual chores and responsibilities of middle age, has the chance to spend more time with his/her family, volunteer, or contribute to the community. It is also a time to relax and enjoy the fruits of labour and reflect on one's life achievements.
Retirement is often seen as a well-deserved break from the stress of work and a time to enjoy the simple pleasures of life. It can also be an opportunity to focus on personal development, such as learning new skills or taking up new hobbies, etc.
While Retirement can be an exciting and fulfilling time, it can also present challenges, such as adjusting to a fixed income and changes in social relationships. Proper planning and preparation can help individuals make the most of their retirement years and ensure financial security.
Why is Financial Stability essential in Retirement?
Financial stability is crucial for retirement in India because the country's retirement system is largely inadequate, and individuals are responsible for funding their retirement through personal savings, investments, and pensions.
India's retirement system consists of a mix of government-funded programs, such as the Employees' Provident Fund (EPF) and the National Pension System (NPS), and private sector initiatives, such as employer-provided pensions and individual retirement savings plans.
However, the coverage and benefits of these programs are limited, and many individuals, particularly those in the informal sector or self-employed, do not have access to any retirement benefits. According to a report by the World Bank, only 14% of India's working-age population is covered by a pension scheme, and many retirees face significant income inadequacy.
Therefore, financial stability is essential for retirement in India to ensure that individuals have sufficient income to cover their living expenses, healthcare costs, and other needs during retirement.
To achieve financial stability, individuals should start planning for retirement early and contribute regularly to retirement savings accounts. They should also diversify their investments to manage risk and maximize returns. Moreover, individuals should consider purchasing annuities or other retirement products to ensure a steady stream of income during retirement. They should also factor in the impact of inflation and other economic factors when planning for retirement.
How Guaranteed Income Plans are a great option for Retirement Years in India?
Guaranteed Income Plans are a popular retirement savings option that provides a regular income stream to retirees for a fixed period or for life. These plans offer several benefits that make them a good option for retirement years.
Here are TOP 5 reasons to buy Guaranteed Income Plans:
1. Guaranteed Income: As the name suggests, Guaranteed Income Plans offer a guaranteed income to retirees, which is paid out for a fixed period or for life. This ensures that retirees have a steady stream of income to manage their living expenses and other needs during Retirement.
2. Tax benefits: Guaranteed Income Plans offer tax benefits u/s 80C of the Income Tax Act 1961, which allows individuals to claim a deduction of up to Rs. 1,,50,000 on their taxable income. Moreover, the income received from Guaranteed Income Plans is also tax-free, up to a certain limit.
3. Inflation protection: Many Guaranteed Income Plans offer inflation protection, which means that the income payout increases every year to keep pace with inflation. This ensures that retirees are not affected by the rising cost of living during their retirement years.
4. No market risk: Unlike other retirement savings options, such as mutual funds or stocks, Guaranteed Income Plans do not have any market risk. The returns are predetermined, and retirees do not have to worry about market fluctuations affecting their income payout.
5. Flexibility: Guaranteed Income Plans offer flexibility in terms of the payout period, which can be chosen based on the retiree's needs and preferences. Some plans also offer the option to withdraw a portion of the corpus in case of emergencies.
What will happen post 31 March 2023, and how will this affect Guaranteed Plans?
The Finance Minister in Budget 2023 proposed a change in the tax exemption for Life Insurance that might affect some of the traditional plans (other than ULIPs). The change will apply from April 1, 2023, onwards. The traditional plans issued post-April 1, 2023 (other than ULIPs) that exceed a premium of Rs. 5,00,000 will be taxable. The death benefit, however, goes unchanged and will remain to be tax-free as before. Some of the Guaranteed Income Plans might fall into this category as well.
Retirement is the time to rejoice in life and enjoy every moment with comfort and ease. If you are looking to invest in guaranteed income plans to secure the future and Retirement, then doing before 31st March, 2023 would give the maximum tax benefits.
