RETIREMENT need not be only about gardening and reading. If planned for, it can be the best stage of your life, without children that need attention and loans that need paying.

Here are the some pointers on how to plan your retirement.

To plan your retirement, you need~ Time
Start early. Use the Power of Compounding that can make even a small amount add up to a substantial one. Start investing the small amount of your investments to a suitable pension fund.

~ Commitment
This needs discipline. There should be a regular outflow towards your goal till you retire. This is often easier said than done because your immediate needs may seem stronger than a future requirement.

~ Adjustment
Prices will rise by the time you retire and continue rising post your retirement. Account for inflation because it will affect you as long as live. Your standard of living might change. In fact, it would have constituted a major increase in your expenditure pattern rather than inflation, over the last few years.

~ Detailing
When accounting for base expenses for your retirement, don’t forget to include all expenses currently being reimbursed by your company. Medical or travelling expenses may not pinch you right now, but they will at a later stage, since you will bear them yourself post retirement.

~Selecting the right option
At this stage, keep your options open on an annuity distribution cycle and service providers. Once pension options open up in India, we might see a variety of more suitable options available.

But till then, bear in mind the following:

~ Lock-in
Your pension plan should NOT have any flexibility or liquidity options. Avoid withdrawal or liquidity options during the contribution (wealth creation) period. The corpus you generate must be available for an immediate annuity option from the time you retire.

~ Tax benefits
Understand the tax benefits of any pension plan. Your accumulated corpus must be tax free; only annuities at the time of receipt should be taxed. Making any guesses about the tax structure about that time would be hazardous.

~ Focus
Try never to look at additional benefits. Each of these will cost you and, thus, reduce maturity benefits. Any pension plan should only generate maximum retirement corpus.

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