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How to Plan For Retirement In Your 50s?

dateKnowledge Centre Team dateJuly 07, 2021 views217 Views
Buy the Best Retirement Plan | Retirement Planning

Reaching the age of 50 years is a milestone in numerous ways. Not only is your life open to welcome new adventures and opportunities, but it comes with some financial hurdles as well. One of the most complicated financial difficulties that a person can encounter is planning for post-retirement life. This problem can become pressing when you have entered your 50s and still do not have a retirement plan.

However, you might have heard that it is always better to start late than never start at all. Hence, you must not feel disheartened as planning for retirement in your 50s can also bring you stable returns in the coming 5 or 10 years to lead a well-disposed life after retirement.

Four Ways to Plan for your Retirement in your 50s

It would always be a smart choice to have your retirement plans in place by the time you reach the age of 30 or 35 in your life. However, if you haven’t planned for your retirement already, there is still some hope to resolve this situation. Planning for retirement in your 50’s will have to be distinct from what you would have portrayed planning in your 20’s or 30’s.

The main reason for this is that you a set number of years left to catch up for all your lost time at this stage of your career. Your retirement planning will have to be thoroughly calculated as you must carefully balance the risk and reward. Mentioned below are some of the tips you can follow to save for retirement in your 50s:

1. Assess your financial requirements

One of the most important tips you must follow if you plan for retirement in your 50s is to consider all your financial requirements and status. Taking a look at your prevailing financial situation is important to build a more informed plan to fix all your monetary obligations.

This financial requirement and status can easily be calculated, taking into account your present and future expenses along with calculating your current assets and investments. In addition to this, you must also analyze how long the funds you have will persist. You must always keep in mind the inflation factor while determining these requirements.

2. Focus on savings

Another thing that you must follow when you plan for retirement in your 50s is to focus more on your savings. This is the only way through which you can expand your investment for a peaceful retirement. You can choose the retirement or pension plans that offer a higher return on investment or increase the sum you invest every month.

At this stage in your life, your main focus must be on maximizing and increasing your savings. According to various financial experts, if you are in your mid or late 50s, you must always look for low-risk investment options that allow you to save around 35 to 40 percent of your earnings.

3. Don’t rely too much on the provident fund

Provident Funds are regarded as one of the most secured investing platforms, and it is highly recommended that every person hold a PF account. However, relying solely on your PF for post-retirement requirements is not something you should attempt for.

You must always ensure that your investment portfolio holds a mix of equity and retains the returns on investments on an upward graph. If you hold only 10 years left for your retirement, you can initially begin your investments with some equities and progressively shift to more secure options.

4. Invest your funds in the best pension plans

If you are commencing your retirement planning at the age of 50, you must know that there is not much time left for your retirement. Hence, it is always good to invest your funds in the best pension plan that gives you higher returns in a lesser duration.



However, you must note that when you invest in retirement or a pension plan, your premium amount will be higher than what you would have spent if you opted for a pension plan in your 20s or 30s.

Canara HSBC Oriental Bank of Commerce Life Insurance offers a wide variety of savings plan to help you with your retirement planning. Here are some of the best pension and retirement plans to invest in, even if you are in your 50s.

1. Invest 4G

Invest 4G plan provided by the Canara HSBC Oriental Bank of Commerce Life Insurance is a Unit Linked Life Insurance Savings Policy. This assists you in meeting all your short and long-term goals as it can get tailored as per your requirements.

2. Guaranteed Income4Life

This Guaranteed Income4Life plan is another pension plan that provides you with a fixed monthly income, along with premium protection option and option to cover your spouse. As it provides a regular stream of income during your retirement, you can consider this retirement plan and align your financial goals accordingly.

3. Guaranteed Savings Plan

Guaranteed Savings Plan comes with a Premium Protection Option assists you in obtaining a guaranteed income post-retirement. It has various plan options that you can consider as per your risk appetite and savings goals. It also provides life cover for the complete term while you pay premium for limited period.

Retirement planning in your 50s is not an ascending battle if you remain focused and do not make any determinations out of panic. Keep your plan manageable and prioritize your requirements over your wants. Planning and strategizing your financial goals can help you map the perfect plan that you need to have a peaceful retirement life.

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Frequently Asked Questions (FAQs) for Retirement and Pension Plans

The premium is one of the most important factors to consider before buying a policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the Premium calculator available in the ‘Tools and Calculator’ section of www.canarahsbclife.com.

The Invest 4G plan offers three benefit options to choose from. If you have opted for the Life Option or Whole Life Option, the insurer will pay the nominee(s) death benefit if the policyholder meets with an unfortunate incident. However, in the Life Option with Premium Funding, the policy continues even after the death of the policyholder. The company pays the remaining premiums until the policy matures.

Life is unpredictable and so it is important to prepare for all eventualities. If you regularly save a substantial amount of your income for retirement, the corpus may expand to a comfortable level before retirement. In case you become disabled and are unable to contribute to the retirement plans, most plans will continue to multiply your savings. The amount already accumulated will continue to grow and besides the existing plans you can also choose to invest in pension schemes specifically designed for people with disability.

Investment in ULIPs like Invest 4G plan qualifies for tax deductions under section 80C of the income tax law. The maturity benefits of ULIPs are also tax-exempt under section 10 (10D) of the Income Tax Act, 1961. However, if the premium paid during the policy term is more than 10% of the sum assured, the maturity proceeds will be taxable.

The concept of early retirement is catching up fast in India, but there are no specified ages for early retirement. While in some western countries the age between 35 and 45 is considered favourable for early retirement, in India the ideal age is 45-50 years. With the right planning and investments, it is not very difficult to retire early.

At the age of 35-40, people generally have several responsibilities such as children’s education and various EMIs. It is difficult to spare a substantial amount of income for retirement. Depending upon the needs of the household and the lifestyle, one should aim to save around 40-50% of his/her income. Around 10% of the income should exclusively be allocated for retirement planning. Here are some tips to choose the best retirement plan.

  • Focus on your needs: It is easier to formulate a strategy when the goal is clear. Make an estimate of the amount required to sustain your life. Take inflation into account and zero in on the targeted corpus.
  • Research thoroughly: Conduct thorough research before investing in any financial product. Read the term and conditions properly and try to understand how an investment product fits your needs.
  • Consider different products: The market is awash with all kinds of investment products. Do not follow conventional advice as the need of every person is different. Take into consideration all the suitable products, conduct an objective analysis and then invest.

Owning a house is a cherished dream for many. There are several ways to save for a new house, but in urgent cases, people may be tempted to withdraw from their retirement fund. There are various financial products for retirement planning, and all have different withdrawal rules. In the case of the National Pension Scheme, partial withdrawals for special purposes like buying a house are allowed only thrice during the policy tenure. However, to avail the withdrawal facility, you should be an NPS investor for at least 10 years and you are permitted to withdraw only 25% of your contribution. If you have a PPF account, you can withdraw 50% of the accumulated amount, but only after staying invested for at least 6 years. The Invest 4G plan also allows partial withdrawals after five years of investment.

The quantum of monthly savings depends on the specific needs of the buyer. Financial advisors, however, suggest people save around 15% of the monthly income for retirement.

Retirement plans such as NPS have a very low entry threshold. It is also open to all and anyone can open an NPS account and start saving. A small business can also invest in Invest 4G plan from Canara HSBC Oriental Bank of Commerce for as low as Rs 5000 every month.

The choice between paying off a student loan or start a retirement account is not a difficult one. Starting early for retirement planning has its own advantages but extending the student loan will increase the interest burden. You will have to find a balance between the two. Try to pay off the student loan as soon as possible, but do not hold back on investing in a retirement account.

Most people nominate their spouse to receive retirement benefits in their absence. But a spouse is not automatically entitled to be the beneficiary of a retirement account owned by the other spouse.

Gold is a safe investment asset and investors often flock to the yellow metal to stabilise their portfolios. Holding a small quantity of gold can be considered as the intrinsic value of gold remains intact. You can also choose to have an exposure to gold through ULIPs. ULIP funds invest in a variety of asset classes and some fund options also have a small exposure to gold. You can choose fund options with gold to have a small and indirect investment in gold.

While there are no explicit rules barring the use of retirement account to finance real estate, it may not be advisable to do so. For instance, you are allowed to avail loan from the PPF account from the third financial year. The loan can be used to finance real estate, but it would defeat the purpose of having a dedicated retirement account.

While there are no explicit rules barring the use of retirement account to finance real estate, it may not be advisable to do so. For instance, you are allowed to avail loan from the PPF account from the third financial year. The loan can be used to finance real estate, but it would defeat the purpose of having a dedicated retirement account.

The government has allowed all central government pensioners to open a joint account with their spouses.

Vesting date or age signifies when your pension plan’s accumulation phase is over and the distribution phase can begin. For example, in a deferred annuity plan, you may have a vesting date which is 10 to 30 years away depending on your age at entry. You will continue to invest or stay invested till the vesting date. After the vesting date or age, you can start receiving the pension or withdraw the money from the plan.

The steps may differ from plan to plan. However, you can buy the online retirement plans following the steps below:

  • Retirement Calculator: Use a retirement calculator to estimate your corpus need and expected monthly investment amount to achieve it
  • Choose Plan: Select the online retirement plan you want to start investing in
  • Contact Information: Fill in the personal details including the contact information. Make sure to put the correct e-mail ID which you can access since all future communication about the policy will take place via e-mail.
  • Define Your Investment: Select the goal, investment term, investment frequency and amount you want to invest (based on the calculator estimate)
  • Select Fund Allocation: Online retirement plans give you the option to invest in multiple assets including equity funds. You can select the ratio in which your premium will be allocated to these funds as per your risk appetite. Then select one of the portfolio rebalancing strategies.
  • Select Withdrawal Plan: You can withdraw money based on set milestone or systematically from the plan after the lock-in period. Select the options for withdrawal as per your plan.
  • Review Plan & Investment Details & Complete the Application Form

You can pay the premium amount before or after completing the application form to start investing.

The best time to plan your retirement is when you are planning your career. However, this may not be the time when you really start investing money for your retirement. You must start investing in your retirement plan as soon as you start earning.

Retirement is the only financial goal you cannot repair with other means of funding like a loan. Thus, developing the habit of investing with every income you have is the best way to have a comfortable retired life.

Insurance allows your family, especially your dependent spouse to continue living without financial worries if anything happens to you. Also, insurance may help you save enough for retirement in case of permanent disabilities. Additionally, life insurance retirement plans allow you to build a good retirement corpus with bonus additions.

Yes, you can change the nominee of the policy anytime you need. If you are using an Electronic Insurance Account (EIA) to manage your policies, you can change the nominees anytime from this account. Otherwise, you can contact the customer care to update the nominations on your policy.

You can opt for auto-debit of the premiums from your savings account. You can also pay the premiums online using your debit card, credit card or a payment wallet.

You can get Rs. 1 Core pension plan using the online retirement calculator. The calculator will assess your eligibility and provide you with the probable monthly or annual investment to achieve the goal. If the amount seems feasible you can complete the purchase online or set an appointment for a qualified advisor to help you in the process.

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