Above is the article about How you should plan your retirement and put projections. I Like one thing about this article very much and that is, they have put very realistic future projections about your future expenses. They have taken into consideration both the Inflation & Living Standard.
According to the first table, Inflation is taken as 5% on and average for next 30 years. And the standard of living will increase by 4% every year. Post-retirement they have assumed 5% return from the Corpus of Retiree. However, you can get 8-10% safe return from your Investments, But in the above example, they have considered 5% as a post-retirement return.
- So if you are 25 years today and want to retire at 60 than you will require approx. Rs.1, 2, 3, 4 & 5 Crores post-retirement every year if your current living expenses are Rs. 5, 10, 15, 20 & 25 Lakhs.
The Table shows various other examples and situations.
On the Second page, the graph showing the comparison of ULIP, Endowment & Pension Plans. The graph shows that, ULIPs have clearly beat the performance of Endowment & Pension Plans.
The reason is simple. Because Endowment products offer just fixed return per year while ULIPs are attached to Equity. And thus the return from ULIPs is much higher than that of return from Endowment & Pension Products.
An Endowment Plan provides the lowest return because the first year commission charges can be up to 120% on Investment. Also one does not know how the fund management charges are levied. So even though Endowment Plans offer Tax benefits, they do not provide enough money for retirement needs.
Thus, ULIPs are the great choice in comparison to Endowments & NPS (National Pension Scheme). And Companies like ICICI Prudential offer wide range of ULIP Products.
So rather than not investing anything, you should go for long term Investment in ULIPs.
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