Your Money: Have you planned for your retirement years?

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People pursue government jobs for many amenities and one of them is pension. But getting one is tricky. But this amenity can be brought into private employees too.

Pension is a scheme that employees or government give to their citizens after they are beyond their employable age.

In some cases, it is given to infirm and for those that cannot be employed or can find employment because of socio-political and economic causes.

The earlier form of pensions could be seen in the Roman Empire, Rashidun and Umayyad Caliphate. The modern form of pensions has started since Bismarck’s Germany. Ever since his introduction pensions, became a part of the modern world.

In India pension for an employee is something that is seen only in the government sector. That and other amenities are the factors that make every young Indian look for government employment.

But it is not easy. Many state PSCs are moving the employment part of their duty at a galactical pace. It is also rigged with corruption and favouritism. When it comes to the central government, one faces difficult exams and interviews.

Among those who venture out for employment in the private sector are those, that are sure enough to expand their career and skill set enough to build their annuity/pension. But this is in the form of bank balances and assets.

For others that cannot do so should start planning as a pension is important for their future. They are living in a nuclear family in a highly individualistic urban space. Their children will not be with them.

To fend for oneself with consistent earning is a necessity, which is the reason why pension/annuity is important.

This is a necessity for a population like India, which is seeing increasing life expectancy, with a rapidly ageing population in a few states.

So, a private sector employee needs to plan a retirement life with privately purchased pension schemes.

The first step lies in visualising the retirement life. That will help in calculating an approximate amount of income one needs at that time. That will become the target amount they have to work for or accumulate.

The second step is, bridge the current amount and target amount. This can be done by analysing present-day savings and projecting their growth by the time of retirement.

The final step lies in identifying a retirement-specific savings plan. That to ones suitable for the users’ risk appetite and other considerations.

Such annuity products offer guaranteed income regularly, which would last for the entire lifetime of the user. This gives them a financially independent life that extends throughout their retirement life.

Several banks and insurance companies offer several of these products for future pensioners, and it is up to the wise decision of the pensioner to take one.

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