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The relevance of Investments specifically in Retirement to keep your future safe and secure

Why Investments

Investment is any action taken to enhance the value of a product with its appreciation, raise future revenue options to meet the long-term objectives, and is a form of saving to meet future, unavoidable and unfortunate emergencies that involve financial expenditure.

The biggest difference between Savings and Investments is that Investments involve a certain degree of risk whereas savings is just putting aside your money for future use without any risk involved. Investment is lending your funds to a third-party venture or scheme which generates higher profits but also inculcates a degree of risk.

There is hardly any chance of savings to be doomed but there is a good chance of investments going wrong.

Long Term Investment Plans

  • ULIPs
  • Equity Funds
  • Real Estate
  • Public Provident Fund
  • Bonds
  • Mutual Funds
  • Investment Plans

Retirement Investment Plans

  • Deferred Annuity - In a deferred annuity, a lumpsum amount is invested or even a monthly or annual premium-based plan can be taken for a fixed duration. Annuity payment begins after a specific tenure.
  • Immediate Annuity – After buying the plan, a regular monthly income starts immediately and is guaranteed for the whole life.
  • Annuity Certain – The life insurance company invests the money for the applicant and pays back the amounts generated for the whole life.
  • With cover and without cover pension plans - Pension plans with cover comprise coverage of life which means that in case of demise of the investor, a lumpsum security amount is given to his family or dependents on his behalf to ensure security and safety of this family members. The without-cover does not have life coverage, in this case, if the applicant passes away, the nominee is eligible for the corpus only. Examples with cover Retirement plans are deferred plans and an example of without cover pension plans is an immediate annuity plan.
  • Guaranteed Period Annuity – In this case, whether the investor survives the period or not, the annuity option is provided for a fixed period like 5, 10, 15, and 20 years.
  • Life Annuity - This annuity is paid till the death of the investor. He is also eligible to choose the option – with his spouse which means that after his death, the pension amount will be paid to this wife or vice versa.
  • Whole Life ULIPs - Popularly knowns for paying out till the investor is 99 or 100 years old, the coverage is also extended to the investor’s family in case of his death.
  • Defined Benefit and Defined Contribution – Contributed through an Employers fund which guarantees a specific fund for retirement

Defined Benefit and Defined Contribution - Contributed through an Employers fund which guarantees a specific fund for retirement

Defined-contribution plans are solely contributed by the employees from his gross salary in addition to the funds contributed by the employer, thus enhancing the total coverage for his retirement.

  • NPS - National Pension Scheme is a government-backed plan to provide social and financial safety and security to the working class.
  • PPF - Public Provident Fund
  • Mutual Funds
  • Bank Deposits.
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