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Saving for retirement should start quite early in your professional life. An individual who starts early can enjoy the buffer of a larger corpus after retirement and can continue their standard of lifestyle when a regular source of income diminishes.

It is essential to have a savings account for retirement as the life expectancy is increasing and the number of active years in retirement phase has increased manifold as well.

Pension plans are one of the many sources of post-retirement income.

Pension Plans & The Retirement Savings

Pension plans are provided by employers and allow employees to save money for post-retirement life. The following are the many plans for senior citizens which provide them financial security.

  • ICICI Pru –Easy retirement
    • Policy term – 10 to 30 years
    • Minimum premium Rs. 48000 per annum which can be paid monthly, quarterly and half yearly.
    • Minimum entry age is 30 and maximum is 85 years
  • Bajaj Allianz-Pension Guarantee
    • Minimum entry age 37 and maximum is 80 years
    • Min purchase price is Rs.25000 and no maximum limit for price
    • 6 annuity options

Important Tips & Strategies for Retirement Saving

Retirement planning and pension plans are meant for the retired. This is a very wrong notion as there is no age to start saving for retirement.

The important tips can assist you in planning your retirement

  • Start early
  • Always look for opportunities to save money
  • Don’t save or invest emotionally and don’t indulge in short sided investment
  • The investment should be proportionate to the salary
  • The investment portfolio should be multifaceted and should have exposure to equity, debt, and fixed income securities.

Common Mistakes Investors Commit While Preparing a Retirement Plan

  • starting out quite late
  • Don’t consider the impact of inflation. As retirement planning is a long-term goal, it will feel the pinch of inflation.
  • The scare of equity market deters them from investing in it. They mostly do it in fixed deposits hence garnering a comparatively less return on investment.
  • Money in a forced saving account like EPF designated by the employer should not be prematurely withdrawn and should be kept for covering post retirement
  • PPF is a much better option than fixed deposits due to its higher interest rate and tax benefits.

Multiple Savings Account & Pension Schemes to Safeguard on a Rainy Day

In the Indian tradition, the concept of money saving is entrenched since the time of birth. No one wants to live at the mercy of a financial burden and feel comfortable in any financial contingency.

  • Advantages of Savings account or scheme:
    • It is available through both public and private sector banking infrastructure
    • It’s quite easy to open a savings account
    • The investor has multitude of options to choose from

The following accounts are necessary and must be considered to plan for a healthy and a stress free retirement

  • PPF or public provident fund: It’s a government savings scheme with an investment period of 15 years, extendable every 5 years after that. The interest earned in PPF is tax free.


  • High interest rate
  • The investment can range from Rs. 500 to 1,50,000
  • Maximum of 12 investments per year
  • Tax deduction via form 80C
  • Post Office savings account has a countrywide reach including rural and semi-rural areas. It’s a very secure account and is perfect for senior citizens looking for a regular source of income.


  • Can be opened with an amount of Rs. 20
  • Interest earned is tax free up to INR 10,000
  • Nomination facility is available
  • VPF or Voluntary provident fund: The investor willingly invest 100% of his basic salary and dearness allowance into their employee provident fund instead of the usual 8-12 %
  • National Pension Scheme: It’s a pension plan which provides a regular source of income via annuity through the funds deposited by the investor during their employment time. One can open a Tier I and a Tier II savings account but Tier II can only be opened only if the investor has An active Tier II account
  • Saving scheme for retiring public sector employees: This easy to register with a minimum fuss over documentation savings account is a big hit for the patrons. It can be opened through a demand draft, locally payable cheque along with a certificate from the employer listing the pension benefits.
  • Employer provident fund account is a mandatory provident fund savings account in which the employer and the employee each contribute 12% of the salary amount to a provident fund on a monthly basis. This fund can be either used as a retirement fund later.
  • Senior citizen savings scheme: the applicant should be 60 years at the time of applying. Person taken a VRS or is retired between the age 55-60 can also apply, provided they fulfill certain criteria.