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How to Plan for Retirement Depending on Your Age

There are a lot of individuals who think that they should start focusing on retirement planning only when they approach the retirement age. However, this is nothing more than just a myth. In fact, you can start planning for your retirement early itself. If you’re wondering how to start, then here’s something that may help you out.

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


How to plan for retirement depending on your age?


The way you plan for retirement and the type of retirement plans that you may opt for may vary depending on the age bracket that you fall under. This is precisely why we’ve come up with a guide on how people in their 30s, 40s, and 50s should approach their retirement.


Individuals in Their 30s


Your 30s is the time you may start thinking about retirement investment. By the time you reach your 30s, chances are that you’re in a well-paying and stable job. If that’s the case, then you should start by charting out a plan for your retirement. Right from the age at which you’re planning on retiring down to the kind of lifestyle that you wish to lead; every major aspect of your post-retirement life should be planned out.

Once you’re done with that, the next step is to start investing. Since you’re still quite young, you might have a strong risk appetite and may be able to afford to invest in high-risk investment options like equity. Also, now may be the time to invest in a long-tenure life insurance plan as you’re young and the premium or any charge towards your life cover may be less than what you may have to pay in older age.


Individuals in Their 40s


If you haven’t planned for your retirement by the time, you’re in your forties, now may be a good time to start taking it seriously. Most individuals set their retirement age at around 60. And if you’re like them, then you probably have only around 20 working years left. And since your risk appetite tends to go down by this time, you may do well by investing in a combination market-linked instruments. This way, you can continue to create wealth and stay protected from risks.

Also, it is preferable to consider investing in retirement plans right away. There are investment options where you’re required to make regular contributions for a certain period of time. And once the tenure of the plan expires, you receive regular income, which you can use to take care of your post-retirement expenses. There are multiple types of retirement plans available. So, make sure to choose one that fits your needs and requirements.


Individuals in Their 50s


Although it isn’t preferable for you to start planning for your retirement when you’re already in your 50s, it is best not to delay if you have not invested so far. Since you probably only have a few working years left, it may be appropriate for you to get aggressive when it comes to saving. Try to cut out all unnecessary expenses out of your life and dedicate a major portion of your salary towards savings and investments.

If you’re sitting on a lump sum amount of money, then it would be preferable for you to invest in an immediate annuity plan, which is one of the many retirement plans available right now. Also, while you’re at it, remember to consider investing in a comprehensive health insurance plan as well. Considering that you’re aging, chances of you developing health issues would be high. And a health insurance plan can protect your savings from taking a hit.


About Deferred Annuity


Deferred annuity retirement plans require you to make a lumpsum or regular contributions for a specified period of time after which you start receiving annuity payments from the insurance company each month or as per your chosen frequency payout. You can receive your regular annuity income immediately on completion of premium payment term or after a certain number of years. All of the above are depending on the plan you choose and its underlying terms and conditions.


About Immediate Annuity


Immediate annuity retirement plans require you to deposit a lump sum amount with a life insurance company. And in return for that, you receive annuity payments monthly or as per your chosen frequency. These regular income payout can be a worthy replacement to your salary during your post retirement life and can be used by you to take care of yourself and your family.


What to Look For When Buying Annuity?


One of the major things that you may consider when purchasing an annuity plan is the type of plan that’s suitable for you. If you’re a young individual, then buying a wealth accumulation product makes more sense since time is on your side, and you get to accumulate a large corpus. However, if you’re nearing your retirement age, then an immediate annuity may makes more sense, and you would need to start considering getting annuity payments.




Now that you’re aware of how to approach your retirement, go ahead and consider investing in such options now. Choose the suitable retirement investment plan and make sure that you financially secure the second innings of your life.


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The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.

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