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How to Plan for your Dream Vacation House at Retirement?

dateKnowledge Centre Team dateMay 24, 2021 views347 Views
Plan for your Dream House at Retirement | Retirement Planning

You don’t just work for your present, you work to build a better future for your children, and then one day watch them stand on their feet and tell you to relax. This is what the working class calls retirement. It is a period when you don’t want to worry about the rising kitchen expenses, your phone bills, and hopefully about the size of the birthday gift for your grandchildren.

If this is what your dream retirement looks like, why not enjoy it from the comfort of a vacation home? But the question is – Buying a retirement plan will be enough to support your goals?

What are the Financial Goals at Retirement?

Working with a retirement goal in mind is an excellent way to invest during working life. One important thing is that you must have a definite goal for your retirement. You may want to go on a world tour, or you may want to buy your dream vacation house by the time you retire - be clear of what you want.

Plan for your Dream House at Retirement | Retirement Planning

Having such goals gives you purpose in life and the energy to work hard every day. To achieve your retirement goal, be clear with below:

  • The age at which you want to retire: You may not like to work till 60 years, or you may like to continue work till the age of 65. The first step is to decide your retirement age - when would you like to retire.
  • Decide your retirement goal: You have to be very specific in defining your retirement goal. If you want to buy your dream vacation home, decide what kind of house you would like to have.
  • Calculate the money you will need: You have to decide how much you would need to build your vacation home. Once you have the amount in your mind, it becomes easy for you to create your financial plan.

You may want to buy a vacation house in the outskirts of the cities where you can spend some quality and peaceful time with your family. To have it, you will probably work for 30 years or more.

Is there something that can make the journey easy? Working to earn money is the wheel of one side of your car in your financial journey. The wheel of the other side is your investment decision – the kind of investments you make.

For this goal, you certainly need to focus on investments as chances of securing and using a home loan to buy a new property would be out of the question. You need to understand that after retirement buying a property has to be completely based on your savings. Thus, you need to do the following:

  • Identify the kind of property you’d like to buy and what it costs now
  • Estimate the future cost of this property close to your retirement
  • Find an investment plan and how much you need to invest every year to achieve the goal within the time you have

If you make good investment decisions, reaching your goals will not be a struggle but a happy and memorable journey. Since the journey will be pleasurable, the destination (your vacation house) will be blissful.

How to Save for your Dream House?

You have a clear understanding of your goal, and you decide to start saving for it. When you begin to save, the biggest challenge is to decide which financial instrument to invest in. Few investments stand out when your goal is long-term and large – Invest 4G ULIP from Canara HSBC Oriental Bank of Commerce Life Insurance:

  • Invest in multiple asset classes – Equity, Debt & Liquid Funds
  • Reduce your income tax at the time of investing in the plan
  • Tax-exempt maturity value
  • Online investment and portfolio management
  • Completely automate your investment routine and growth

Invest 4G offers everything you will need to comfortably achieve such goals without having to continuously worry about your investments.

How does Invest 4G Work Towards your Dream House at Retirement?

Invest 4G ULIP offer features that will help you grow your money faster with maximum tax efficiency. Here’s how the plan will help you achieve your dream vacation home:

Invest in a Mix of Assets

The plan allows you to allocate your investment to equity and debt funds in a ratio you are comfortable with. Remember equity means high-risk but also means high-growth, whereas debt is low-risk and more steady growth.

However, equity needs time and a systematic approach to investing. Thus, you should ensure a higher allocation to equity at the beginning of your investment period.

Automate Portfolio Management

Unless investing is your profession or you are quite passionate about financial markets, you should seek to automate your investment management. Invest 4G ULIP gives you four automated portfolio management strategies to use for this purpose:

  • Systematic Transfer Option

    Invest into an equity fund every month, regardless of your investment frequency

  • Return Protector Option

    Protect your returns from equity funds by transferring them to debt as they cross a defined threshold

  • Auto Fund Rebalancing

    Maintains the allocation ratio of different funds as selected by you. Equity growth will lead to the funds flowing from equity to debt and vice versa when debt performs better than equity. This strategy is best for taking advantage of the market volatility

  • Safety Switch Option

    Systematically moves your entire equity portfolio to debt in the final four years of your investment period. Thus, saving the funds from volatility without missing the chance of growth.

With these strategies, you can be sure to participate in the market even when you are too busy with your work and family.

Wealth Boosters & Bonuses

The Invest 4G plan rewards long-term investors with bonus unit allocations. If you are a regular investor and have been paying all your premiums on time, you become eligible for a Loyalty Addition bonus. This bonus adds a few extra units to your portfolio without an additional cost.

Learn how to adjust your investment portfolio post-COVID.

If you stay invested for more than 10 years, you also become eligible for Wealth Booster bonus additions.

Tax-Free Partial Withdrawals

Partial withdrawals from the ULIP plan are completely exempt from tax after the lock-in period. The Lock-in period in ULIP is five years long starting the commencement of the policy. Within this period, it is mandatory to invest in the policy unless you wish to surrender the plan or there is a pending death claim on it.

Tax-free maturity proceeds make it easier to use this plan for any large financial goal. So, if you are planning to retirement happily or early, you need to make a mix of investments. Experts always say not to out all the eggs in one basket. Hence, choose your investment portfolio carefully and diversify it with a mix of assets for gaining returns. Canara HSBC Oriental Bank of Commerce Life Insurance has a wide variety of saving plans that you can consider for your investments.

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Frequently Asked Questions

How Savings Plans by Canara Help You?

Every person has a unique reason to save and invest. With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. With savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, you get adequate flexibility while investing and receiving the savings benefits.

Who should invest in a Savings Plan?

Savings plan require you to invest a pre-decided amount on a regular basis. People with a regular stream of income who require a lump-sum amount after a period should opt for a savings plan. Working professionals, self-employed people and businessmen should consider a savings plan to meet their long-term financial obligations. Savings plans are also ideal for people who are risk-averse and want to accumulate funds through relatively safer mediums. These plans inculcate financial discipline in policyholders which make them crucial for every portfolio.

What is saving plan?

A savings plan is likely to be different for everyone depending on the financial goal, risk profile, returns, and investment horizon. If you are young and want to save for your retirement, ULIPs like Invest 4G or Titanium Plus plan would be the best option. You are likely to create a large corpus by your retirement through market-linked returns. If capital protection is your aim, then traditional insurance plans such as Guaranteed Money Saving Plan should be suitable for you.

How much money should you put in savings each month?

The amount that should be invested in a savings plan each month depends on the income, existing financial obligations and the long-term financial goal. If you have a steady income, you should save at least 20% of your monthly income. It is not necessary to invest your entire money into a savings scheme as investments should be diversified. Ideally, you should aim to have a financial buffer of over 10 times of your annual income.

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Saving plan for retirement

The Invest 4G plan with its multiple investment options and various portfolio management strategies for capital protection is an ideal saving plan for retirement.

Saving plan for future

The Smart Goals plan with its unique features such as modification of the sum assured partial withdrawal and fund switch can help you plan for your long-term financial goals.

Saving plan for girl child

The Future Smart unit-linked plan from Canara HSBC Oriental Bank of Commerce Life Insurance is the ideal savings plan for the girl child.

Where should I invest my money?

You should spread your investments across financial instruments. However, having a suitable savings plan in your portfolio is extremely important. It ensures financial stability and also helps in fulfilling short, medium and long-term monetary goals.

What is a good age to start saving money?

When you plan to invest in a financial product, it always pays well to start early. The earlier you start saving and investing, the better. When you start investing early, the capital gets adequate time multiply. Even a small amount invested for a long time can give substantial returns due to compounding.

Tax Saving Investment for retired mother

Savings plans are tax-efficient investment instruments. Samridh Bhavishya traditional savings scheme designed to ensure regular income after retirement is the best savings plan for retired mothers.

Should you use a savings plan for retirement planning?

Yes. Retirement planning is one of the most important financial decisions of our lives. Saving plans offer a host of features that may help you build your retirement corpus. Some of the saving plans like Guaranteed Income4Life offer guaranteed returns at policy maturity. Such returns can act as a regular income stream even after your retirement to help you stay financially stable.

Are saving plans beneficial for managing unexpected expenses?

Yes. Best saving plans in India offer partial withdrawal system that can be utilized during your rainy days. Being financially prepared to tackle such odds will help you manage any unforeseen expenses in a smooth manner.

How to save tax by using savings plan?

Saving plans are known for helping us achieve our financial goals. Best saving plans allow you to grow your wealth while providing life cover. Saving and investment plans are also beneficial for tax planning. Premiums of savings cum protection plans come with tax benefit under Section 80C of the Income Tax Act. Moreover, proceeds received upon the death of the policyholder or upon the maturity of the policy are tax free under Section 10 10(D).

What is the right age to start saving money?

When you plan to invest in a financial product, it always pays well to start early. The earlier you start saving and investing, the better. When you start investing early, the appreciation in capital is significant. Even a small amount invested for a long time can give substantial returns due to compounding.

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How a savings plan can help in building your child’s education fund?

Saving plans help in building wealth over time against the investments that you make. Choose the best savings plan to build an education fund for your child. The best saving plan for kids offered by Canara HSBC Oriental Bank of Commerce Life Insurance eases the stress of planning your child's future by providing a lump-sum payout on the investment.

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How Savings Plans by Canara HSBC Oriental Bank of Commerce Life Insurance can help you?

Every person has a unique reason to save and invest. With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. With savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, you get adequate flexibility while investing and receiving the savings benefits.

Read More
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