BubblyBurrito

Suggest best pension plan to invest in

Hi, I am thinking of buying a pension plan through which I could get a good fixed monthly income after I retire ( let's assume 60 years). I am currently 32 year old and looking to invest around 20k per month. I am currently working with a startup.I first thought about NPS and also some plans on Policybazar. I founds that plans mentioned on Policybazar like Tata AIA life insurance capital guarantee solution can offer upto 6.5L/month tax free income after I turn 60 with just 20K investment per month for next 12 years. Where as if I invest 20 k per month in NPS till i turn 60 I will only get 1.8 lakhs per month

I want to understand

Why is there such a huge gap in the return amount between NPS and retirement plans available on policybazar
How to select the best retirement plan
What are the top pension plans available in the market currently
Any other better way to plan retirement

15mo ago

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SwirlyTaco

Stealth15mo

Pension Plans are a bad idea. Ask them to show you a calculation of the RoI over the years.

I'd be surprised if it's anything above 6%. It's one of the worst products on the market.

Talk to a good financial planner. Build a diversified asset portfolio - 60 Equity: 40 Debt. Keep pumping in money and rebalance annually.

You'll have enough monthly withdrawable via this corpus.

TwirlyNarwhal

ServiceNow15mo

Can you elaborate more on this!

SwirlyTaco

Stealth15mo

You'll barely meet inflation with the pension plan. You'll have inadequate insurance cover. It has inadequate tax benefits (if thats what you are looking for).

It's an old product with mixes insurance and investing - costs are higher vs you doing those two financial goals independently.

FluffyCupcake

Amazon15mo

My first hypothesis here is - NPS will provide you 60% lump sum and only 40% goes into annuity. I guess you missed the 60% part. Overall, monetary benefits in NPS would be higher as it’s a market driven instrument with Indian markets expected to roar in coming decades.

Can you add some calculations here? Tata AIA is an annuity plan, bit confused how the numbers are so high.

P.S. - Mixing insurance & money backs is worst financial instrument.

BubblyBurrito

CityMall15mo

I considered 100% as an annuity. Did the NPS calculation using a calculator available on the NPS website. Saw the tata AIA policy on Retirement plans section on Policybazar

FluffyCupcake

Amazon15mo

Yes, just google “NPS Calculator”

PrancingLlama

Stealth15mo

I am in mid 20s How much should I invest in NPS to have a decent pension post 60?

JazzyNarwhal

Stealth15mo

NPS is very good. You can consider. You don't necessarily need pension plans to plan your retirement. You can plan it through SWP in mutual funds, participating plans etc too. Retirement and health insurance planning are complicated. Have a holistic plan instead of thinking too much about pension. You can use NPS for annuity plans too during maturity. Contact a CFP, certified financial planner or if you want to mail me, SreekanthAdvisory@gmail.com. I'm an IRDAI insurance advisor and NISM certified mutual fund distributor.

ZoomyPenguin

Stealth15mo

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