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Long-Term Investing: Boost Retirement Income with an Income Booster

A long-term investment plan for retirement is essential to lead a financially independent life. By investing in income booster plans, you can substantially increase your retirement income.

  • 2,372 Views | Updated on: Mar 18, 2024

Retirement is a phase of life where you can relax and enjoy quality time with your family. It also provides opportunities to follow your dreams and pursue your passion. There are various schemes and plans which can help plan a smooth and financially sound future.

Long-term investing is one of the ways through which you can plan your retirement with your current income. It demands a portion of the income regularly, which goes toward the retirement pool and can be redeemed with interest after a certain age. There are various ways through which you can start planning your investment, some of which are discussed in this blog.

Why Long-Term Investment Plan for Retirement is Important?

Future financial planning does not have any cons; it is a seed that provides sweet fruits when you need it the most. Retirement is one such stage where you have a limited income source, and have to rely on your savings and investments. To avoid financial concerns at that age, you must look for long-term investment strategies.

With a small amount invested regularly from a young age, you can accumulate a decent amount of wealth returns by the time you reach the age of retirement.

You can also avail of tax benefits attached to long-term investing plans. This not only strengthens you financially but also protects your dependents against any future uncertainties.

Did You Know?

According to United Nations Population Division, World’s life expectancy is expected to reach 75 years by 2050 from the current 65 years, which results in a sharp increase in the number of retirement years. Thus, inflation, along with life expectancy, makes retirement planning essential.

Invest Today to Enjoy Tomorrow- How to Boost Retirement Income?

To have a financially independent life after retirement, you must consider the right retirement income planning and investment options that can provide you with a stable income. Such investments can benefit you even more if you start investing as soon as you start earning. But don’t worry if you have not started planning yet; this section will provide you with retirement fund options that can be your continuous source of income after retirement.

National Pension Scheme

NPS is a government-based initiative to provide regular income after retirement, along with market-based returns. Under this scheme, your savings are pooled into a pension fund which is invested by PFRDA professionals in diversified portfolios comprising Government bonds, Corporate debentures, and shares. This combination of investments accumulates over the years and grows. Once you are retired, you can withdraw the amount you require and use it.

Retirement Income and Income Booster

A regular retirement income is important to continue living a similar lifestyle that you enjoyed while earning. With plans like income booster, you can plan your retirement in a better manner because of the following features, it offers:

  • You have the option to receive income at any time after the completion of 60 years.
  • You can get retirement income in the form of systematic withdrawals.
  • You can choose the percentage and the frequency of payment that is, yearly, half-yearly, quarterly, or monthly.
  • In case the fund value drops to 105% of the total premium, the retirement income terminates, but the policy still remains in force. You have the option to start the payout again after the fund grows beyond 105% of total premiums.

Senior Citizen Saving Scheme

As the name suggests, Senior Citizen Saving Scheme is specially designed for senior citizens to enjoy life post-retirement. It allows senior citizens to receive quarterly interest payments by opening a Senior Citizen Saving Scheme account with a minimum deposit of ₹1,000. It also offers a high-interest rate of 7.4% per quarter. The maturity period of the scheme is 5 years; however, individuals can extend it for 3 more years by following some documentation.

Unit Linked Insurance Plan (ULIP)

ULIP is a long-term investment option that provides dual benefits of insurance and investment. That means it offers guaranteed returns along with insurance protection. It is a financial solution linked to the market as one part of your investment goes towards insurance, and the other is invested in long-term schemes such as stocks, bonds, and mutual funds. Moreover, it has been observed that average returns in ULIP are high as compared to other investment products.

Retirement Saving Plan/Pension Plan

This is a type of investment under which you dedicate a part of your income to build up over a period of time, which then turns out to be a source of income at the time of retirement. You will receive a regular payment from your corpus to ensure your monthly expenses are met.

Therefore, in order to avoid any financial difficulty in the future, you must look for pension plans and various other retirement income planning options offered by banks and financial institutions.

Bottom line

With careful preparation and consistency in the investment, you get a secure and comfortable future. Earlier, there were fewer options available for investments which restricted the choice, but now you have various plans, including income booster plans which can help you get better returns over normal investment schemes. In addition, starting investments early in life will help you get the benefit of time for the investments to grow. It also reduces the risk involved with the Funds. So, start planning today to avoid any financial discomfort in the future.

    Key Takeaways

  • By investing in a retirement saving plan, you do not have to worry about the effect of inflation on your money, unlike in regular savings in banks.
  • You can avail of tax benefits associated with investment plans.
  • In case you are the sole breadwinner, investment plans are helpful in taking care of the financial needs of dependents.
  • Start investing a fixed amount from your income regularly towards future financial goals.
  • Start financial planning early in life to reap maximum benefits.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors