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How To Prepare For A Smart Early Retirement Planning

Prepare For A Smart Early Retirement Planning. Read Today

While planning for a comfortable retirement period, most people usually focus on the monetary aspects as saving enough capital to support your retirement days is crucial. However, they often tend to overlook the importance of gaining and maintaining the required documents.

If you want to enjoy a hassle-free investment in retirement plans in India, you need a specific set of documents beforehand. Without the perquisites, you may not be able to zero in on a policy as per your preferences and savings needs.

These plans are necessary to lead a comfortable and financially secure lifestyle in your post-working days. In case you’ve never been into the world of investment ever, make sure you read the article till the end to gain a better understanding of the documents required for a retirement plan.

What Are Retirement Plans?

Retirement Plans often termed pension plans, are investment schemes that allow you to accumulate funds for your future by making small and consistent contributions for a specified time. The contributed funds may also be invested on your behalf to generate income for your retirement.

There are numerous retirements or pension plans available in the market. While every plan differs from one another based on several aspects, you must look for the coverage offered through a reliable retirement calculator tool available online.

Once the tenure of your policy is over, you’ll begin receiving regular income through an annuity plan. If you want to enjoy financial security during the most restful period of your life, you must not delay getting a pension plan for yourself.

Documents Required to Purchase a Pension Plan in India

While zeroing in a policy, you’d be asked to provide a specified range of documents by the insurer as a part of their verification process. Here’s a quick list of all the documents that you need to enroll in a retirement plan and proceed with your pension planning:

1. Document for Age Verification

To verify your age, an insurer may ask for a document such as Driving License, Passport, Voter ID, High School Marksheet, or Birth Certificate. You can provide either of these documents to complete the age verification process.

2. Documents for Identity Verification

The insurer also needs to verify your identity before allowing you to invest in a retirement plan. You can either provide a Passport, Driving License, Aadhar Card, PAN Card, or Voter ID to successfully verify your identity with the insurance partner.

3. Documents for Address Proof

While purchasing a retirement or pension plan, you also need to provide proof of residence as per the present mandates. It can be done through a variety of documents such as Ration Card, Aadhar Card, Telephone Bill, Electricity Bill, Passport, or even Driving License.

4. Documents for Income Proof

The insurance company may also ask you for proof of income to determine whether you can pay the required premiums or not. You can provide a Salary Slip, IT Return File, or  Bank Statement slip to verify your source of income.

In addition to the aforementioned documents, you also need to submit the proposal form by duly filling it. Moreover, some insurers may also ask you to get a medical check-up done before approving your proposal for a retirement plan.

Benefits of Pension Plans in India

Guaranteed Income

A retirement plan acts as a reliable and stable source of income for your retirement period. You can plan the payouts beforehand to attain financial independence in your post-work days. Moreover, to make a rough estimate of the required financial corpus, you may also use a retirement calculator. Keep in mind that the preferred financial corpus also contributes to the overall premiums that you have to pay for the policy benefits.

Multiple Investment Choices

There are several unique retirement plans that offer varying choices of investments as per your risk appetite. Whether you want to invest in a high-risk and high-return plan or a fairly lower-risk one, you can easily find a preferred investment instrument with retirement plans to make your pension planning a lot more flexible and convenient. The type of investment you choose also determines the returns you can gain over time.

Greater Liquidity

Pension plans are generally considered as low liquidity products that allow you to withdraw your funds even at the time when they’re still being accumulated. This allows you to stay protected against any kind of unforeseen emergencies and prevents you from depending on any external body or banks to gain financial help.

Death Benefit

 The best thing about retirement plans is that they also carry a death benefit. It allows your chosen nominee to receive an assured sum in the event of your unfortunate death during the policy tenure. The amount is generally kept at 105% of the total premiums that you’ve paid throughout the policy timeline. Moreover, your nominee can also choose from various payment terms such as lump sum, recurring income, or a combination of both.

Tax Benefits

You can also avail of tax benefits with a pension plan under section 80C of the Income Tax Act of India. Moreover, there are various other provisions like chapter IV-A of section 80CCC, 80C, and 80CCD for tax benefits. The Atal Pension Yojana and National Pension Scheme are also subjected to tax deductions as per the same norms. Therefore, these plans work as great tax-saving tools as well in addition to providing a comfortable life to you in your retirement days.

Final Words

If you want to sustain comfortable living standards after you’ve no longer an income holder, you must start pension planning as early as possible in your life. There are various different plans available in the market as per your requirements. Make sure you assess your personal financial needs using a retirement calculator before choosing a policy.

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