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Retirement Planning for Newly Married Couples

dateKnowledge Centre Team dateMarch 26, 2021 views161 Views
Retirement Planning for Newly Married Couples

Attention newlyweds: life seems all good and peppy until the reality strikes in. While it is undeniably one of the happiest chapters of our life, it still requires a lot of planning and implementation. Let’s address the elephant in the room. Although you maybe young and thriving, you need to think about retirement and plan for it way ahead. Whether it’s a life insurance that you are considering to invest in, or you want to buy that handcrafted dinnerware you set your eyes on last week – you have to include your spouse in the decision making process. Here’s a guide to plan for your retirement if you have just tied the knot. Remember, the sooner you start saving for rainy days, the better it gets.

In this article, we will discuss:

What is Retirement Planning?

Time to drop the truth bomb – you cannot work forever. What will happen when you decide to stop working? What you or anyone who is dependent on your income will do when you retire? The average life expectancy is also increasing, which brings in the chances of medical emergencies. That’s when retirement planning comes into the picture. A plan for retirement ensures that your savings or income from any source will allow you to enjoy the lifestyle you want.

Primarily, retirement planning is about getting your finances in order so that when you stop working, you don’t face any difficulties in maintaining the lifestyle that you have lived with.

You are partners for life. So, it is needless to say that you both should contribute to prepare a retirement plan for your future. The approach you follow to manage your finances may evolve over time with respect to your needs and financial circumstances.

When is the Right Time to Plan for Retirement?

The best time to plan for retirement is NOW! Start your preparation as early as possible as retirement plans yield in benefit resulting from compounding interest. Retirement planning is a long-term process and it may require you to switch your saving pots often till you find the right savings plan. In other words, start planning for your retirement the day you receive your first paycheck.

If you already have a plan and same is with your partner, you both should sit down and discuss about merging both your plans because you are on the same journey. Keep your financial goals, retirement expenses and your current income in account while planning for retirement.

Benefits of Retirement Planning

There is a wide array of benefits of retirement planning and one of the most important one is – living an uncompromised and peaceful life even after you decide to stop working. Listed below are a few benefits of retirement planning:

  • Returns that Beat Inflation

    If you choose to invest in retirement plans, it may help you get returns that beat inflation. However, you have to ensure that you choose the best savings plan to get favourable returns. So, when you start investing in a savings plan for building your retirement corpus take inflation into account. Choose a plan that has the highest degree of customisation. Our needs and lifestyle change as we age. Find a plan that allows you to increase your savings cover as per your changing life stages.

  • Tax Benefits

    Myriad of investment plans are already flooding the market. If you haven’t invested in any of them, then it’s high time to pull your socks up and find an investment plan. You can start with a life insurance plan too. Choose a savings plan and start your investment. It helps in saving tax as such investments qualify for tax exemption under Section 80C of the Income Tax Act.

  • Stress-free Retirement Life

    This is the ultimate benefit of having a retirement plan. You can enjoy your retirement days and reap the benefits of all the savings that you have been doing over the years. Such investments provide flexibility to choose “regular payout option of maturity benefits”. This will act as a regular income stream and you can lead a worry-free life without being a burden on anyone.

5 Tips to Prepare a Retirement Plan

Let’s start from the start. To accumulate a sufficient corpus for retirement, you need to plan for your retirement early. However, if you do not plan well in advance, it may turn out to be a little difficult for you later in life.

Here are 5 tips to help you prepare or choose the right retirement plan for your protection needs:

  • Calculate your Joint Net Worth

    As a couple, it is important to understand the combined financial health so that you can find the perfect retirement plan to invest in. Calculate how much you both earn and what financial goals you both have before buying a retirement plan. Both of you may have to prepare a budget for your future expenses so that your finances stay on track.

  • Determine the Expected Expenses

    First of all, calculate your current expenses and also consider your partner’s expenses, even if they are employed. Remember that your lifestyle may change over the years and so is the case with your partner. Therefore, calculate your everyday expenses by taking inflation into account for your retirement period.

  • Choose an Investment Horizon

    Decide the age at which you want to retire. Then, calculate the years that are left for savings. The result is the investment horizon. Also, consider your health condition and your partner’s before investing in a retirement and pension plan. The current condition of your health will have an impact on the premiums that you have to pay when you opt for a savings plan that offer life cover too.

  • Invest in Saving Plans Diversifies Investments

    When you are looking for the best retirement plan to save something aside, you must not overlook this option. Plans for retirement should offer option to diversify your investments. There are saving plans that allow you to invest in a single fund or in a combination of funds, for example, Invest 4G.

    Know more about Invest 4G.

  • Avoid Using your Retirement Funds before the Determined Period

    This is one of the most committed mistakes. People generally use their retirement funds way before they retire. It has a significant impact on the retirement corpus. Emergencies do not knock on the door with a notice. However, it is better if you keep aside some portion of your monthly income in an emergency fund. Do not treat a retirement fund as an emergency fund. A retirement plan is designed to help you through your retirement period without much struggle.

Top Retirement and Pension Plans to Consider

Investing in the best retirement plan will yield beneficial result during your retirement days. You have to choose a retirement plan that works best for your life goals as every plan may differ from another. To buy the best plan for retirement, you must determine the corpus that you are aiming for. And accordingly, you need to find a plan that is flexible.

Canara HSBC Oriental Bank of Commerce Life Insurance has an array of retirement and pension plans that you may consider.

  • Invest 4G

    It is a Unit Linked Insurance Plan that is highly customisable and offers 8 fund and 4 portfolio strategies to invest money. In addition to that, it has three different cover options to choose from. So, you can easily align the savings plan according to different life stages. Systematic withdrawal option creates additional income stream during the term of the policy.

  • Guaranteed Income4Life

    It is a savings cum protection plan that offers guaranteed benefits as well as regular income. You may use this plan to align both long-term and short-term financial goals. Guaranteed regular income ensures that your post-retirement expenses are well-managed with the corpus that you have built over the years.

    Know more about Guaranteed Income4Life.

  • Guaranteed Savings Plan

    This plan provides life cover for the entire policy term while you pay premium only for a limited period. Also, Guaranteed Savings Plan offer guaranteed benefits at maturity. Customise your savings horizon to enjoy stress-free retirement days.

Final Thoughts

The approach to retirement planning has evolved over the years. Some people may enjoy the guaranteed income that comes with a retirement and pension plan, while some may rely on government pension schemes for their retirement days. The crux is – you need to have plenty of money during your retirement days to take care of you and your partner’s needs. In short, the more you both are prepared, the better your retirement period will be.

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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

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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