How To Build A Retirement Plan Using Insurance & Investments

(MENAFN- Kashmir Observer) Retirement is a phase when people want to enjoy more quality time with their families, work on their long-due dreams, or travel more. However, all these require thoughtful preparation. A strong retirement plan

Understanding Your Retirement Needs

Before making any financial decisions, understand what you may need after you stop working. Think about your lifestyle, expected expenses, healthcare needs, and future responsibilities. While some costs may decrease, medical and daily living expenses often increase due to inflation. For example, an expense of ₹50,000 today may become much higher after 20 years. Planning early helps build a strong base so your finances can keep up with changing costs through your retirement years.

ADVERTISEMENT The Role of Life Insurance

Life insurance plays an important role in long-term financial security. It helps your family manage expenses, maintain their lifestyle, and handle financial responsibilities if something happens to you (in case you are the life assured). Whether it is a term plan or another life insurance solution, the key purpose remains protection. Many planners suggest having coverage of about 10 to 15 times your annual income. Using tools like a pension calculator helps estimate how much protection and financial support your family may need in the years ahead. Plans from trusted insurers support long-term financial confidence.

ADVERTISEMENT ADVERTISEMENT Savings Options for Retirement

While insurance provides protection, structured savings and investments help build the corpus needed for retirement. Different options serve different needs:

• Public Provident Fund (PPF): A long-term government-backed savings option known for stability.
• National Pension System (NPS): Encourages retirement-focused saving with equity and debt exposure.
• Mutual Funds: Suitable for those seeking higher growth potential over long periods with market-linked risk.
• Unit Linked Insurance Plans (ULIPs): Combine life insurance with market-linked investments. Part of the premium goes toward life cover, while the rest is invested in selected funds.

Note: The investment risk in the investment portfolio is borne by the policyholder.

Choosing the right mix depends on your comfort with risk and your long-term financial goals.

Combining Insurance and Savings

A strong plan balances protection and wealth-building. Relying only on insurance may not help build the required corpus, and relying only on high-risk investments without protection may expose your family to financial challenges.

A practical approach is:

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