Many investors and policy buyers often mistake a retirement investment plan as a means of savings until they are 65. Actually, if you start early and are in for long-term planning, these plans offer whopping benefits.
A Retirement Pension Plan works in two stages:
1) Accumulation stage: The stage when you start and continue to invest in policies, to build a retirement corpus.
• At the start, you choose a pension plan, and the estimated amount you wish to receive upon maturity. This will help you align your policy term to your desired age of retirement.
• Choice of the investment period (Premium Paying Term) – Depending on your lifestyle choices as well as investment and risk appetite, you need to decide the period for which you want to pay the premium for the plan. In case of a lump sum investment, you will be paying the whole amount at once.
2) Vesting age: The age at which your pension plan will start paying out. Your decision to quit your job at an early age will depend a lot on your financial status.
• Once your retirement pension policy matures, you can avail the built corpus based on the annuity options chosen by you.