Grow Your Investment Nest With Pension Planning
Anil Bajaj and Vipin Sen were colleagues and good friends, but both had different natures. On the one hand, where Mr. Bajaj was fond of spending money, on the other hand, Mr. Sen was responsible enough to save it and invest it for future use. After retiring from the company, they both worked in Mr. Baja had a total of Rs.50,00,000 in his bank account, whereas Mr. Sen had a total of Rs. 80,00,000 in his bank. There was a major difference in the total savings. But the question here is why?
While working together, Mr. Sen accumulated the extra money that he earned and invested it into the retirement pension plan. Mr. Bajaj was more into flushing his money into luxuries. This made him realize what loss he has made. For having a comforting and independent future, one is supposed to start the race to save from initial days so that the golden period of life doesn’t go in vain. So, the thing here to enlighten is how you can grow your investment nest with pension plans?
WHAT IS PENSION PLANNING?
Everyone will stop work one day, and there will be no more paychecks. Pension or investment planning refers to investing in a long-term period so that the accumulated investments give you a secured and independent future. In this plan, the employee and the employer invest a fixed amount on regular intervals to pension accounts as a pension fund, which could be withdrawn after retirement by the employee.
TIPS TO INCREASE THE PENSION NEST
1. DON’T WITHDRAW FROM EPF ACCOUNT
One of the biggest keys to success is staying consistent and punctual. Try not to withdraw from your EPF account till it matures and transfer it while you switch jobs.
2. STAY CONSISTENT
If you maintain an individual pension account, make sure you are consistent and punctual in depositing investment. Don’t delay or skip; it will only lead to insufficient investment for future use. Automate your SIP route, and this will help you stay consistent as even if you forget to pay the installment, your bank will not.
3. STASH THE EXTRA FUNDS
Whenever you get a pay raise or increment in your salary, don’t just spend it randomly and burn the extra funds; involve 10-15% of it towards pension contribution.
4. PAY YOURSELF FIRST
Probably a Gucci bag or LV shoes could wait a bit longer. Dreams run with the money, and to fulfil one keep a check on how much you spend and on what. Make a budget plan regularly to avoid the excessive flow of income into random things, So that your retirement pension plan has enough for the future.
5. BE AN EARLY BIRD
Don’t copy what others do and how they do. Take a stand for yourself, decide and start as early as possible. The legal age to start investing in pension plans is 18 years in India. Find what is suitable for you and the earliest age you can start investing for your future needs.
6. PENSION CHECK
Keep a close eye on your pension account at regular intervals. See and calculate how much you need to save for the future and where you stand today. To check your accumulated retirement pension fund, you can simply use the services of the official website put up by the government, i.e. www.epfindia.gov.in.
7. TAX DEDUCTION POLICIES
The government also tried to help you to save your pension fund in different ways. One of them is through pension tax. According to section 80C OF Income tax act (ITA), your pension plan’s investment is tax-deductible; the accrued interest is tax-free.
You need to consider yourself the best option to help you get off the storms and pave the way to an independent and rich life with luxuries after retirement. One thing here is to start at the right time and know that the more you save, the more you have for tomorrow.
One day you have to get retired, you have to get old, and it is a fact that no one can change. You must be prepared for your personal needs after retirement, the fund to get your children luxuries and for their marriages and education. So, scribble a path today on paper and follow it to T to secure your future and for a happy family.
The more you save, the more you have for tomorrow. But ideally, half of what you earn should be invested in a pension fund for a secure future and benefits. There is absolutely no restriction on how much to withdraw and keep in a pension account after you retire. If you want to withdraw all your savings after retirement, no one can stop you from that.
WHAT PERCENTAGE OF MY INCOME SHOULD I INVEST IN PENSION?
CAN I WITHDRAW ALL MY MONEY AFTER 60?
The more you save, the more you have for tomorrow. But ideally, half of what you earn should be invested in a pension fund for a secure future and benefits.
There is absolutely no restriction on how much to withdraw and keep in a pension account after you retire. If you want to withdraw all your savings after retirement, no one can stop you from that.