Retirement can be one of the most crucial components of your financial plan. Since the flow of your professional income can stop after retirement, you should plan your finances in advance to lead a comfortable life in the future. When you aspire to retire, you might aim to save an ample amount of your earnings for a secure retirement period in the future.
Although savings can be crucial, investing should be an imperative part of your financial plan if you want to live a financially secure retirement period. There are several retirement investment plans in the market that can help you to maintain your current lifestyle even after retirement. Moreover, the right retirement investment plan can succeed in providing you with a stress-free retirement period without worrying about financial constraints.
Before you choose a retirement investment plan, let’s take a look below to know the top five plans mentioned below that can help you build your retirement portfolio:
- Unit Linked Insurance Plan (ULIP)
A ULIP plan is dual-benefit product, which can allow you to diversify your investment portfolio as well as receive life coverage. Since a ULIP plan is a mix of investment and insurance, you can safely invest while protecting your family financially. It is a flexible option, which can allow you to choose equity funds at a young age and switch to debt funds after you reach retirement period. Due to its maximum flexibility, you can decide to pay your premium in return for the coverage based on your current financial situation. Typically, a ULIP plan can let you pay your premium quarterly, monthly, half-yearly, or annually.
- Health insurance
Ideally, you might prefer to retire during the usual retirement age, which can be between 55-60 years. During this period, the chances of suffering from severe health conditions such as kidney failure, cardiovascular diseases, and so on can be relatively higher. Since the severity of such diseases can be high, medical costs can also be more. Hence, you should buy a health insurance plan to receive financial aid during medical emergencies as well as to avail cashless treatments. With a health plan, you can receive timely medical treatments without financial constraints.
- Balanced Fund
A balanced fund is for those retirees who prefer a mix of equity shares as well as debt investments such as government bonds. Under a balanced fund, you can partly invest in the equity market as well as stay invested in less-risky instruments. While your debt investment can provide interest regularly, the equity investment can allow you to receive profits based on market performance. A balanced fund can let you stabilize your retirement portfolio, which is why you should invest a major proportion of your money under balanced funds.
- Equity Mutual Fund
Unlike balanced funds, an equity mutual fund can divert your whole invested capital into equity. However, you can choose your equity investments based on your risk tolerance. For instance, a blue-chip fund can allow you to park your money in equity shares of large-scale organizations. Due to an investment in huge companies, your hard-earned savings can grow steadily at a higher rate. As an investor, you can actively participate in the equity market via Systematic Investment Plan (SIP) that can ensure a disciplined investment habit.
- Term Plan
Many of you might have financial dependants after your retirement. Since your dependants rely on you to fulfill their financial needs, you should ensure that you safeguard them from all the uncertainties. With a term plan, you can financially secure your loved ones from contingencies such as loss of income or job, death, critical illness, and so forth. Term insurance is a protection plan, which can provide a financial payout called death benefits to help your family in your absence.
To conclude, retirement can be a mix of an ample savings and the right type of investment tools. Although your savings might seem enough for your retirement, you should not base the foundation of a comfortable retirement period on it. Due to the high unpredictability of life, you might use your money to handle an emergency. Therefore, see to it that you opt for investment tools that can allow you to grow your money as well as diversify your financial portfolio. Moreover, you can calculate your retirement corpus on a retirement calculator to commence your early retirement plan.