Kotak e-Term Plan
Kotak e-Term Plan provides a high level of protection to your loved ones in your absence.
Kotak Guaranteed Savings Plan
Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality.
Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs.
Kotak Health Shield
Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability.
Kotak Lifetime Income Plan
Kotak Lifetime Income Plan gives you the security of your income continuing throughout your life and in your absence throughout your spouse's lifetime!
Retirement planning should be one of the most important parts of your financial goals to lead a safe and sturdy life with your loved ones in the future. You do not want to end up in a situation wherein you are having to look for options to fund your emergency requirements and needs. However, many of you do not know where to begin, and so, unfamiliar banking terminologies can seem a little intimidating. Therefore, to help you out, here is a list of retirement planning terms to build some confidence and help you get started.
The Employees’ Provident Funds and Miscellaneous Act, 1952, governs the primary system and functioning of the Employee Provident Fund, also commonly known as EPF. In this, both the employee and the employer contribute 12% of the employee’s base salary and dearness allowance to the fund. The current interest rate on EPF stands at 8.50% per annum.
An annuity plan is an agreement you enter into with a financial services company or an insurance company. The firm offers to give future income (typically with some earned interest amount) for a fixed number of years or for your entire life. Annuity plans are a great option for people who want to enjoy a consistent level of income when they no longer work. Fixed, variable, instant, and index annuities are some common examples of annuity plans. It is advisable to consult a financial advisor before making any decisions.
Defined contribution schemes are the ones where you invest a specific amount and the pension is calculated based on the fund returns and the amount you contribute. Products like EPF and National Pension Scheme (NPS) fall under this category. In NPS, you can invest till 60 years of age. There are various other variations available in NPS where you can go in detail but we would talk more about it in some other article.
Defined benefit plans are becoming increasingly rare as a consequence of the rising costs and the degree of risk employers assume when financing and monitoring investments. However, they are very common, sponsored by employers, and ensure guaranteed monthly payments to employees. There was a time when a share of your EPF was transferred to Employee Pension Scheme. It had a set formula and everything, but since September 1, 2014, EPS was discontinued for employees earning more than ₹15,000 a month.
An IRA is a retirement-savings investment account wherein the IRS has imposed an annual contribution limit. These accounts take tax exemptions into consideration which means that they offer tax advantages based on the sort of IRA you pick. You can start drawing money from your IRA once you reach the age of 59 and a half. You will be risking additional tax penalties if you withdraw the money prior to this age.
Traditional IRAs are tax-deferred retirement plans, which implies that you contribute pre-tax earnings and don’t pay taxes on the money until it’s distributed. At the time of withdrawal, you are charged at your current marginal tax rate. Annual contribution restrictions apply to traditional IRAs, and you must start taking required minimum payments (RMDs) by the age of 72. The traditional account is also a type of IRA.
Now that you have some knowledge of what falls under retirement planning, you can go ahead and start your very own journey to lead a fulfilling life!