Many of us
engage in an economic activity to make a living. And with competition around we
often work hard and try to give the best within our means to our family in times
where inflation monster haunts us. But while we do all it takes to keep our
family happy, prudent financial planning can bring in solace in our endeavour to
give best to our children and even save for the golden years of retirement. Mind
you, many misconceive ad-hoc investing with prudent financial planning and often
think they are on the right path to meet life goals. But let's
apprise you that investing along with planning is rather a serious activity and
often boring, as against the excitement depicted by the market intermediaries
(i.e. agent / brokers / distributors / relationship managers), glamorous
business channels and friends.
Today, while all of us want to have a cosy retirement life ahead the onus of indeed making it cosy ahead (during the golden years) is on us as investors. There are host of investment avenues available to plan for retirement, but it is imperative that your investment portfolio intended to achieve you goal of retirement, to have the right mix of asset classes and investment options therein. Annuity in the form of pension which takes care of our cash flows during retirement is something very much desire; but it imperative to plan for the same wisely and not get lured to inappropriate products, merely getting carried away by the exuberance created by the market.
In a market condition that seems to be uncertain, you need to follow the right investment approach.
Ideally all your investment moves should be demarcated by in-depth knowledge.
Today, while all of us want to have a cosy retirement life ahead the onus of indeed making it cosy ahead (during the golden years) is on us as investors. There are host of investment avenues available to plan for retirement, but it is imperative that your investment portfolio intended to achieve you goal of retirement, to have the right mix of asset classes and investment options therein. Annuity in the form of pension which takes care of our cash flows during retirement is something very much desire; but it imperative to plan for the same wisely and not get lured to inappropriate products, merely getting carried away by the exuberance created by the market.
In a market condition that seems to be uncertain, you need to follow the right investment approach.
Ideally all your investment moves should be demarcated by in-depth knowledge.
We have often
seen investors getting hooked on pension plans offered by insurance companies,
in their objective of planning for their golden years. It is noteworthy that
earlier, until the new guidelines on pension products issued by Insurance
Regulatory and Development Authority (IRDA) came into effect, guaranteed returns
were not offered to policyholders. But now by the virtue of new guidelines from
IRDA, a number of life insurance companies are planning to launch pension products that will now offer capital
guarantee - where you as the insured will at least get back the total
premium paid.
Life Insurance Corporation, HDFC Life Insurance, Birla Sun Life Insurance and ICICI Prudential Life Insurance have already launched pension products while few others including Bajaj Allianz Life Insurance and Aegon Religare Life Insurance are mulling options.
But should you invest in these pension products?
Well we are of the view that, in the process of planning for your retirement it imperative to undertake a holistic exercise considering your:
Life Insurance Corporation, HDFC Life Insurance, Birla Sun Life Insurance and ICICI Prudential Life Insurance have already launched pension products while few others including Bajaj Allianz Life Insurance and Aegon Religare Life Insurance are mulling options.
But should you invest in these pension products?
Well we are of the view that, in the process of planning for your retirement it imperative to undertake a holistic exercise considering your:
- age;
- income:
- expenses;
- risk appetite
- existing assets;
- existing liabilities;
- intermediate goals (which you are catering to viz. children's education and their marriage) and
- nearness to goals
Taking into
account the aforementioned along with the inflation factor (which haunts most of
us and has eroding effect on our savings) would help you plan for your
retirement prudently by having in place the right asset mix in your portfolio
and investment avenues therein. But you need to act early, and not procrastinate
executing the plan - as that may not help make your retirement life cosy.
Moreover you got to refrain from digging into your retirement corpus, unless you
absolutely need to (where your contingency funds are drained out).
The pension products from insurance companies, while they provide an annuity they do not help you optimally structure your retirement planning. The aforementioned new product launches are taking place since life insurers offering pension products withdrew them last year following IRDA's guidelines relating to pension plans that said all unit-linked pension plans (in which a part of fund is invested in stocks or bonds) should specify assured benefits on pension plans, applicable on death, surrender or maturity. So, there's no point merely getting swayed by the tall claims and sales pitch of your insurance agent. Instead it is imperative to have structured, intelligent financial plan in place for your retirement which can ensure smooth and cosy retired life ahead.
The pension products from insurance companies, while they provide an annuity they do not help you optimally structure your retirement planning. The aforementioned new product launches are taking place since life insurers offering pension products withdrew them last year following IRDA's guidelines relating to pension plans that said all unit-linked pension plans (in which a part of fund is invested in stocks or bonds) should specify assured benefits on pension plans, applicable on death, surrender or maturity. So, there's no point merely getting swayed by the tall claims and sales pitch of your insurance agent. Instead it is imperative to have structured, intelligent financial plan in place for your retirement which can ensure smooth and cosy retired life ahead.
No comments:
Post a Comment