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Things to know for NRI for their Retirement Planning

Non-resident Indians (NRIs) often move internationally for career growth, better earning potential and other reasons. However, when it comes to retirement, they might want to return to India and stay with their near and distant families. Alternatively, they can choose to settle abroad with no plans to return to India even after retirement.

Investment plans also act as tax-planning tools, as many avenues help reduce tax liability. There are different types of investment plans, and by choosing the right one, you can invest according to your needs and grow your savings.Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th July 2024
Modified on: 7th July 2024
Reading Time: 15 Mins
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Whatever the choice, planning for retirement is important so that you can retire without financial worries. Whether you are settling abroad or in India, you need an adequate retirement corpus to fund your living expenses and medical bills. As such, when you are working, you can start building your retirement fund, one step at a time, to create a good corpus by the time you actually retire.

When planning for retirement, though, some things should be borne in mind for drafting an effective plan. Let’s understand what these things are.

 

Things to remember when planning for retirement

 

1. Time to retire and life expectancy:

Time to retire is basically the age at which you want to retire. For instance, if you are 35 currently and you are planning to retire at 65, the time to retire would be 30 years.

Estimating the time to retire would help you assess your investment horizon so that you can choose suitable investment avenues. Life expectancy is the maximum age up to which you expect to live. This would help you understand the number of years your retirement corpus should last after you retire. For instance, if you retire at 65 and you expect to survive till 75, your life expectancy is 10 years and you need a retirement fund optimal enough to meet your expenses for the said duration.

Estimating life expectancy correctly is a challenge as life is unpredictable. So, its better to assume that you will live till 99 or 100 years of age and plan accordingly so that the retirement corpus doesn’t fall short.

2. Place to retire:

Place to retire is the country and city where you would live after you retire. This is an important consideration since the living expenses, inflation and medical costs vary across geographies. For instance, retiring in the USA would be more expensive compared to retiring in India. Even in India, retiring in a metropolis like Mumbai or Delhi might be more expensive than retiring in a Tier II or Tier III city.

Knowing the place to retire would help you build up a suitable relocation nest with which you can fund your retirement home.

3. Inflation rate:

Know the inflation rate of the country you wish to retire in. Keep it under consideration when planning the retirement fund. Find out what would be the average living expenses 20 or 30 years later when you retire after factoring in inflation. When you know the expected expenses, after inflation, you can build up an optimal retirement corpus which would be able to meet the inflated expenses.

4. Retirement goals:

Assess your goals after you retire. They can be taking a world trip, buying a luxury apartment, or ticking off items on your bucket list. Based on these goals you can estimate the retirement corpus you would need.

5. Risk profile

Know your risk profile, i.e., whether you are tolerant of investment risks or you want to avoid them. This would help in choosing the right investment avenues which align with your risk preference. Moreover, as you grow older, it may be preferred to switch from risky investment avenues, like equity, and move towards safer avenues, like debt, to protect the corpus accumulated and the returns earned thereon.

6. Exchange rate

If you are planning to return to India or move to another country after retirement, keep the exchange rate in mind as your corpus would be converted into another currency.

 

How To Plan For Retirement?

 

Keep the aforementioned points in mind when considering a retirement plan. Some retirement planning tips may include –

1. Start early –

Start saving early so that you can save affordably and the long-term horizon would add to the corpus through compounding of returns.

2. Save systematically –

Save in a disciplined manner, regularly, to create an optimal retirement corpus. Do not invest haphazardly. Make savings and investments a habit and follow it regularly.

3. Invest in suitable avenues –

Choose suitable investment avenues to plan your retirement corpus. Deferred annuity helps one lock the future annuity rates at current date and thereby financially secure their retirement goals. Moreover, annuity plans allows annuity payments which can create a source of regular and lifelong income after retirement.

4. Diversify your portfolio –

Portfolio diversification can help you spread out the investment risks and enhance the return potential of your investments. So, invest in equity and debt instruments and create a good mix of investments.

 

The bottom line

 

Retirement planning is no rocket science. All you need is a little understanding of your preferences and goals. Start your retirement planning today to build up a suitable nest egg for a financially independent retired life. For securing lifelong incomes, a life insurance pension plan might be a suitable choice. You can choose a deferred annuity plan and save up for retirement. Moreover, if you choose a ULIP, you can diversify your investment across different funds and earn market-linked returns.

So, use the points discussed above and start your retirement planning journey without delay.

References

● https://www.fisdom.com/tips-every-nri-needs-to-know-about-retirement-planning/

● https://economictimes.indiatimes.com/nri/invest/4-tips-every-nri-needs-to-know-about-retirement-planning/articleshow/83299325.cms?from=mdr

BJAZ-WEB-EC-04942/23

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~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

The views stated in this article is not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

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Disclaimer

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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Disclaimer

*Above illustration is for Bajaj Allianz Life eTouch II - A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N198V01) considering Male aged 25years | Non-Smoker | Policy Term(PT)– 30 years | Premium Payment Term (PPT)– 30 years | Sum Assured opted is Rs.1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 5,092. 2nd Year onwards premium Rs. 5,520. Total Premium Rs. 1,65,172 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 40, Income Payout Percentage: 60). Income payout instalment opted for 40 years | Premium shown above is inclusive of Online Discount only, no other discounts have been considered and exclusive of Goods & Service Tax/ any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

##Tax benefits as per prevailing Section 10(10D) and Section 80C (under old tax regime) of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

**5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

$Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium means total of all the premiums paid under the base product, excluding any extra premium and taxes, if collected explicitly.

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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