Best Investment Plan for Retirement in 2024

Retirement plans, or pension plans, are getting very popular nowadays. Yet there’s a common misconception—they’re not just for post-retirement. In fact, the earlier you start, the better chances you have of securing a comfortable life in your golden years. 

When you start saving for retirement sooner, your money gets more time to grow. This happens through compounding, which means your earnings generate more earnings. 

Starting early also helps protect your savings from losing value due to rising prices or, better to be termed as, inflation. So, investing for your retirement now will help you build a strong financial foundation for the future.

What is a pension plan?

A pension plan serves as an investment strategy to help individuals save for their future retirement goals. As mentioned earlier, it is also known as a retirement plan and guarantees a steady income stream post-retirement, ensuring a secure future.

A pension plan allows you to save funds through either lump sum investments or regular premium payments over time. By saving funds throughout your working years, you can accumulate a significant reserve to support your financial needs when you are no longer employed. 

Best Pension Plans in India in 2024

Here are some of the best investment plans for retirement in India:

1. ICICI Pru Easy Retirement Plan

• Entry Age: 18-70 years of age
• Maturity Age: 30-80 years of age
• Policy Term: 10, 15, 20, 25, 30 years
• Tax Benefit: 80C & 10(10D) of IT Act
• Minimum Investment (Yearly): Rs. 48,000

2. LIC Jeevan Akshay 7 Pension Plan

• Entry Age: 25-100 years of age
• Maturity Age: N/A
• Policy Term: Lifetime
• Tax Benefit: 80C of IT Act
• Minimum Investment (Yearly): Rs. 1 lakh

3. Max Life Forever Young Pension Plan

• Entry Age: 30 years-65 years
• Maturity Age: 50-75 years of age
• Policy Term: 10 years to 75 years-Entry age
• Tax Benefit: 80C of IT Act
• Minimum Investment (Yearly): Rs. 25,000

4. Max Life Online Savings Plan

• Entry Age: 18-60 years
• Maturity Age: 18-45 years
• Policy Term: 5 to 67 years
• Tax Benefit: 80C and 10 (10D) of the Income Tax Act, 1961
• Minimum Investment (Yearly): Rs. 12,000

5. Edelweiss Life Tokio Wealth Secure Plus

• Entry Age: 18-60 years
• Maturity Age: 18 to 70 years
• Policy Term: 5-25 years
• Tax Benefit: 80C and 10 (10D) of the Income Tax Act, 1961
• Minimum Investment (Yearly): Rs. 24,000

6. Tata AIA Fortune Maxima

• Entry Age: 18-60 years
• Maturity Age: 100 years
• Policy Term: 100 minus issue age
• Tax Benefit: 80C and 10 (10D) of the Income Tax Act, 1961
• Minimum Investment (Yearly): Rs. 18,000

7. Kotak Premier Pension Plan

• Entry Age: 30-60 years of age
• Maturity Age: 45-70 years of age
• Policy Term: 10-30 years
• Tax Benefit: 80C of IT Act
• Minimum Investment (Yearly): Rs. 1 lakh

8. ICICI Prudential Signature

• Entry Age: 18-75 years
• Maturity Age: 99 years
• Policy Term: 10-30 years
• Tax Benefit: 80C and 10 (10D) of the Income Tax Act, 1961
• Minimum Investment (Yearly): Rs. 24,000

9. Aditya Birla Sun Life Empower Pension Plan

• Entry Age: 25-70 years of age
• Maturity Age: 80 years of age
• Policy Term: 5-30 years
• Tax Benefit: 80C of IT Act
• Minimum Investment (Yearly): Rs. 18,000

10. SBI Life Saral Retirement Saver

• Entry Age: 18-65 years of age
• Maturity Age: 40-70 years of age
• Policy Term: 5, 10-40 years
• Tax Benefit: 80C of IT Act
• Minimum Investment (Yearly): Rs. 1 lakh

Best pension plans by insurance companies

Here are some of the best investment plans after retirement in India offered by insurance companies:

1. HDFC Life Click 2 Retire Insurance Plan

The HDFC Life Click 2 Retire Plan is a unit-linked online insurance plan designed to provide market-based returns and cater to post-retirement needs. With an entry age range of 18-60 years and a maturity age of 18-75 years, the policy spans 20-64 years. 

Key features of this plan include a death benefit higher than the fund value or 105% of the paid premium, vesting benefits, and zero premium allocation charges. 

The plan requires a minimum yearly investment of Rs. 12,000, offering a comprehensive solution for retirement planning with financial security.

2. LIC New Jeevan Shanti Plan 

The LIC New Jeevan Shanti Insurance Plan is a single premium, non-participatory, and non-linked policy. It guarantees returns through Deferred Annuity options, providing two payout choices – Joint Life Annuity and Single Life Annuity. 

The plan is designed for individuals aged 30-79 and matures between 31-80 years, offering long-term income with a one-time investment. It includes an add-on cover for dependents with disabilities. 

Additionally, it features discounted Annuity rates and flexible payout options – monthly, quarterly, half-yearly, and annually.

3. Tata AIA Life Insurance Guaranteed Monthly Income Plan 

TATA AIA’s Guaranteed Monthly Income Plan is a life insurance savings option that ensures financial security. Open to individuals aged 6-60, the policy lasts for 5, 8, or 12 years until maturity at 68.

It guarantees a monthly income for 288 months post-retirement, with higher premiums resulting in increased income. 

The plan allows policyholders to take loans against the policy and offers flexible premium payments (annually, half-yearly, quarterly, or monthly).

Types of pension plans in India 

The following are some of the pension plan types that are popular in India:

1. Life Annuity

Life Annuity guarantees pension payments until the annuitant’s death. Opting for ‘with spouse’ ensures the spouse receives the pension in case of the policyholder’s demise.

2. National Pension Scheme (NPS)

NPS, introduced by the Government, secures an individual’s financial future post-retirement. Investments in equity and debt funds generate returns, and withdrawals have tax implications.

3. Pension Funds

Pension Funds, regulated by the Government (PFRDA), offer superior returns upon maturity. They remain active for a specified period, allowing the withdrawal of annuity sums for financial security in emergencies.

4. Deferred Annuity

Deferred Annuity allows for corpus accumulation through regular or single premium payments, providing pension post-policy tenure completion with tax exemptions on premiums.

5. Immediate Annuity

Immediate Annuity ensures instant pension with a lump-sum payment, offering a range of annuity options. Premiums are tax-exempted under the Income Tax Act.

Benefits of pension plans 

Investing in pension plans offers several benefits:

1. Long-term Savings

Pension plans, being long-term, leverage compounding to accumulate a substantial corpus, ensuring a steady cash flow post-retirement.

2. Protection Against Inflation

These plans safeguard assets against inflation, disbursing one-third of the accumulated corpus after retirement and providing the rest as a monthly annuity, protecting against rising living costs.

3. Compounding Advantage

The power of compounding within pension funds assists in constructing a significant retirement corpus, considering the impact of inflation and unforeseen financial emergencies.

4. Insurance Coverage

Many pension plans also function as life insurance, offering financial protection in case of the investor’s demise before retirement. Additionally, they provide lump-sum withdrawals for medical emergencies.

5. Future Security

Pension plans eliminate the need to liquidate assets for post-retirement expenses, ensuring financial stability. Planning finances in advance with pension plans secures a stress-free future.

Eligibility Criteria 

To qualify for retirement plans in India, the following are the eligibility criteria you must adhere to:

1. Entry Age

Usually starts at 18 years, but some plans require a minimum entry age of 30. The maximum entry age is typically around 70.

2. Premium Payment

Policyholders must meet a minimum premium requirement, influencing the pension amount received.

3. Vesting Age

The age when pension payouts start releasing is typically set at 40 but is subject to variation based on the insurance provider.

Why do you need to start retirement planning today?

To secure a stable future, you must start planning for your retirement right away. Early planning ensures financial freedom, bears the benefits of compounding investments and provides peace of mind. 

Starting your retirement plan early allows your money to grow over time through compound interest, boosting your overall savings. It also helps account for inflation, preserving the purchasing power of your savings and ensuring they can support your desired lifestyle in the future.

What are the steps to buying a retirement plan?

Here are the steps you need to follow to buy a retirement plan in 2024:

1. Calculate the Required Amount: Calculate the required investment amount and determine the current investment needed to meet retirement goals by factoring in inflation.

2. Research and Compare Various Plans: Explore various retirement plans and compare features, benefits, costs, investment options, and payout structures.

3. Choose a Suitable Retirement Plan: Look for a plan that provides a fixed income, flexibility in investment, and additional features like spouse coverage.

4. Carefully Review the Terms and Conditions: Examine the plan’s terms, including the vesting period, contribution limits, withdrawal restrictions, fees, and charges.

5. Purchase the Plan: Submit required documents, such as identity and address proof, and pay premiums monthly, half-yearly, yearly, or all at once.

Final Words

Planning for retirement is a crucial step in ensuring financial stability in your later years. Thankfully, there isn’t any shortage of pension plans of various types. 

Some of the best investment plans for retirement are mentioned in this blog post. You can choose a suitable one based on your specific needs, paving the way for a stress-free retirement. 

However, selecting the right plan requires thoughtful consideration of your current financial responsibilities and future goals. The best plan is one that aligns with your goals, ensuring a secure retirement journey.