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31 Jan 2023, Edition - 2758, Tuesday

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Health & Lifestyle

Why These Best Retirement Plans Are Worth the Money?

Covai Post Network


Time waits for nobody. Try holding time in your hand; it will slip through your fingers like sand. You might have all the luxury you need now, but it’s not promised to be there forever. That’s why you need to stay in the present. However, planning for a secure future is also crucial.

Retirement planning might seem unnecessary right now. You might feel you are too young for it. But planning for the best retirement years of your life would require a little more attention and effort. The earlier you start, the better your retirement will look for you.

Here is why the best retirement plans are worth the money.

1. Independent Living: As parents, you live your entire adulthood trying to build a stable and happy life for your children. You save for their further education; you help them settle down. You live your life for your family. Although, after retirement, you might wish to give time to yourself. You might want to travel, or you might wish to live alone. Now imagine not being able to do any of it because you don’t have a stable source of income post-retirement. Therefore, investing in the best retirement plans will assist you in living independently on your terms without any financial woes.

2. Tax Benefits: Investing in the best retirement plans that offer tax exemptions is advisable. This way, you will end up saving more wealth for your future. In addition, opting for retirement plans offering tax benefits will ensure that it lowers the tax you have to pay. The benefits are offered u/s 80C of the Income Tax Act.

3. Compounding Effect: You must have heard that the earlier you invest in a retirement plan, the more you earn. Therefore, it is advised that you start investing early in your life to sustain funds for your retirement. This is because of the compounding effect offered by the best retirement plans. The Compound effect is the amount of money growing overtime on the interest itself. A compounding effect is one in which you can earn the initial returns made on your investment, interest on interest.

There are various plans available in the market for you to choose from. You can benefit from all those in your retirement. Let us have a look at one such retirement plan to help you ease into the decision-making process.

Unit Linked Insurance Plans or ULIP Plan:
The Unit Trust of India (UTI) launched the country’s first ULIP plan in 1971. Because of their transparency in investment, unit-linked insurance plans, or ULIP plans, are highly preferred. It also provides investors with a double benefit. First, insurance and investment are combined in Unit Linked Insurance Plans. As a result, investors benefit more from a single retirement plan.

Benefits of the ULIP Plan:

1. Life Cover: The ULIP Plan includes a death benefit, which is the amount paid to the nominee if the policyholder dies while the ULIP is still in effect. If the policyholder completes the policy term, they get the plan’s maturity value.

Based on the death benefit, there are two types of unit-linked insurance plans. As opposed to type II, where the nominee receives both the sum assured and the fund value, type I pays the candidate the lower sum assured and the fund value.

2. Tax Benefit: Under Section 80C of ITA, investments in the ULIP plan are tax-deductible up to a total of Rs. 1.5 lacs. Investing in the ULIP plan can save tax and accumulate more wealth for your retirement.

Furthermore, maturity funds are not taxed on their earnings. The Sum Assured shall be at least ten times the Annual Premium. If these requirements are not met, the benefit under Section 80C will be limited to 10% of the Sum Assured, and the maturity funds will not be tax-free.

If you are looking for the best retirement plans to invest in, give the ULIP plan a chance. Read and research your options thoroughly before buying any retirement plan. Secure your retirement life with the best retirement plans today!

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