Unlike in developed countries, where the government takes care of the elderly, there is no social security system in India*. The outdated idea of public sector undertakings (PSU) jobs being future-proof due to pension eligibility no longer exists. In such a scenario, retirement planning is crucial to ensure that we live the life we desire in our post-retirement years. When we reach our retirement age, we need enough money to sail through and more essentially, fulfil our dreams. Due to the challenges posed by the lack of social security and pension systems in India, a good retirement plan is critical. This is where Future Generali’s Lifetime Partner Plan can empower you to ensure your future income right up to the age of 100 years. The plan provides increasing guaranteed monthly income, along with a whole life cover. Let us explore more about a retirement plan in this article.

Importance of a Retirement Plan in India

Having a considerable amount of money to draw from assumes greater significance for the following reasons:

    1. No Government Support

      The need for a retirement plan hinges on a crucial reason: the lack of social security and pension systems in India. It is the single most significant reason necessitating the need for a retirement plan. Unlike the U.S. or the U.K., the elderly or unemployed are not guaranteed a minimum monthly income in India, nor does the state sponsor the post-retirement years of the citizens.

      The establishments that were formerly covered by pension have also come under the ‘Defined Contribution’ system. Not everyone gets retirement benefits like pensions or gratuities on superannuation, and for those who receive them, the amount is insufficient to cover all expenses.

      All these facts indicate that when your earning age comes to a close, the government will not support you. You are on your own. The lack of social security and pension systems in India leads to a void that must be filled.

    2. Soaring Healthcare Costs

      The post-retirement age is when your visits to the healthcare provider likely increase. A major chunk of your savings goes towards meeting these expenses. Further, healthcare costs are on the rise, like all other expenses. More critically, they are not uniform. Your savings can be depleted by a single major illness. Even in countries with social security systems, citizens cover healthcare expenses to make provision for emergencies. So, since India does not have this system, it is all the more essential to opt for a retirement plan.

    3. Rising Inflation

      Inflation is on the rise, diminishing the value of money. Coupled with increased life expectancy due to advancements in medicine and technology, we will require additional income. It can be possible only if we have retirement funds in place, backed by a high-performing retirement plan.

    4. Maintaining a Comfortable Lifestyle

      Financial independence is one of the most crucial reasons why a retirement plan is important. You are accustomed to a certain lifestyle and standard of living during your work life. You cannot let go of all those comforts in your old age, and therefore, need to ensure you enjoy the same lifestyle once your post-retirement life begins. It is also the time to take up hobbies and interests you wanted to pursue but could not due to your responsibilities. A retirement plan will enable you to make decisions without worrying about depending on anyone for finances.

Conclusion

If there is one reason you must plan on your own for your retired life, it is the lack of social security and pension system in India; hence, a retirement plan is the only way to ensure a comfortable lifestyle post-retirement.

The best time to start investing is now. Whether you are salaried or self-employed, there are a plethora of options to choose from. With the right plan, you can handle medical emergencies in your retired life. Furthermore, you will know exactly how far you are from your retirement goal while gaining control over your earnings and expenses. You will also learn the risk tolerance that you may have to speed up your progress towards these goals.

To summarise, a retirement plan will equip you with a complete understanding of your financial goals and help you attain them, beginning today! Visit Future Generali India Life Insurance for more information on insurance policies that can help you plan your retirement.