The Right Time to Start a Long-term Retirement Plan


Are you born with a silver spoon?

Are your current earnings enough to make for the coming generations in your family?

Are you rich enough to take world tours often?

If the answer to any of these questions is a YES, possibility is that you are sorted. But if it is  a NO, then planning for life after retirement is a must for you. 

Rishabh worked with a MNC bank as a vice president. He made enough money annually but he had a big family to take care of. This left Rishabh with hardly any money to save for the emergencies that could arise. It shook Rishabh several times, leaving him to think what would happen in his retirement. Soon after he consulted his financial advisor who suggested that he buy a long term retirement plan. 

If you are also looking for financial security for the post retirement life, you can read further.

Table of Contents

What is a retirement plan?

Importance of Retirement Plan.

When to start retirement planning?

Types of retirement plans and time to buy it.


What is a retirement plan?

A retirement plan is an insurance policy that is designed to take care of your post retirement days. The insurance plan is also called a pension plan that provides you financial protection that helps you lead a stress-free life. The retirement plan helps to grow money and provide a regular income for life. The insurance plan is a way through which you can prepare for finances when your active income stops.

Life after a regular job may appear as a burden to you when the expenses do not reduce but income does. 

Importance of Retirement Plan.

Retirement plan is to help you maintain the standard of living even if you are not in a job. Post retirement, you may have a completely new set of dreams or long hauled dreams. By planning in advance, you can be assured of securing your future life. This makes buying a retirement plan meaningful. Let us explore more reasons to know why the retirement plan is important: 

  1. Maintain the standard of living: With a pension plan, you can save sufficient money for your future. By planning in advance, you can get monthly income that helps you maintain the standard of living. Inflation will affect the cost of things in the future that you can buy easily now. The rising cost makes it relevant for you to have a pension plan for your life.
  2. Be prepared for a longer life: The average life expectancy has improved. The chances of you living longer are greater now. But a long life without money can be a burden. This is why you must be prepared with a pension plan to manage expenses when you live longer.
  3. Handle the unexpected crises: Money always keeps your back strong when you land in unexpected emergencies. After you retire, you would not want to ask for money during the crises. Better is to secure your future financially so that you can manage the sudden and unexpected emergencies.   
  4. Fulfil retirement goals and aspirations: Retirement is the second innings in life when you may wish to have a complete new set of goals. But without money these aspirations can be dreams that cannot be fulfilled. This is why owning a retirement plan can be of great advantage. It keeps you monetarily ready to spend whenever you want.
  5. To battle inflation: The rate of retail inflation in 2021 was 5.59% as per the report published in January, 2022 The Economic Times- a leading daily. Fuel and light inflation rose to a high 10.95% year-on-year. Inflation in the food and beverages stood at 4.47%. This will lead to you with less money when you retire. This is why owning a pension plan is crucial.

When to start retirement planning?

Beginning soon with retirement planning is the best choice. 

The day when you start savings is the right time to buy a retirement plan. 

If later is the word in your dictionary, then trust that time is not close anytime soon. When you consider that retirement age for you will be 60, then 30 is the right time to begin investing a small amount for the pension plan. 

When you start early to save, it is easier to get the benefits of compounding interest or steady income in your retirement days. With the effect of compound interest, the wealth grows faster since it is interest earned over the time. If you understand the benefit of compounding, it is best that you start early with a pension plan.

Things to keep in mind when buying a retirement plan.

These are the factors that you should consider before investing your money in a retirement plan:

  • Pay-off debts faster to plan your retirement: When you start investing in a pension plan, you must first initiate with paying off the debts to get rid of the loan liabilities. Once you are free from the loan EMIs, you can have a secured fund for retirement.
  • Set automatic money transfer: Set automatic bank transfers so that you do not miss your investment dates.
  • Choose annuity plans: If you are looking for guaranteed monthly incomes, then you must choose the annuity plans. These provide you a guaranteed lifelong income only if the policy is in-force.
  • Choose low-risk investments: When you move close to retirement, then it is important that you move your investments towards low-risk options. 
  • Retirement planning calculator: You can use the fund calculator to know how much pension fund you will need after you retire. This way you will be able to manage funds and expenses accordingly.

Types of retirement plans and time to buy it.

There are two types of retirement plans or pension plans that you can buy. 

  1. Retirement Savings Plans
  2. Retirement Annuity Plans

Let us see each of it in detail.

  • Retirement Savings Plans

The retirement savings plans allow you to grow the money over the years well before you retire. This way you can build the wealth regularly over a period of time and create your retirement funds. Apart from building wealth you also get life cover with these plans. In common, individuals look for retirement savings plans when they want their money to grow in a safe manner. But all this requires is planning in advance.

  • Retirement Annuity Plans

The pension helps you get regular and guaranteed income throughout life.The plan provides you regular income every month, six months, quarters or every year. 


Choosing a pension plan is a crucial decision in life as life doesn’t stop when your active income does. If you are left with some years in retirement and want your life to be free from worries, then buying a pension plan is a must. With a pension plan you can get a lump sum amount as your retirement fund on maturity. You can further invest this entire sum of money in an annuity plan to get lifelong regular income. For more details on retirement policy, read here. ]