The term 'Retirement' stands for withdrawal from one's official position or occupation or from one's active working life. Post-retirement the individual ceases to enjoy the regular income which he/she used to enjoy during the tenure of employment. Hence, it is better to start saving early during the initial years of life, to meet the expenses post-retirement.
There are several retirement schemes offered by the government, public and private players in the country that one can choose from to best suit the requirements of the individuals post-retirement. One has to be careful and evaluate all the schemes and analyze it in terms of monetary and other benefits which the scheme offers before zeroing on the best scheme to invest in.
Retirement plans are also known as pension plans. It's a wise choice to allocate a part of the savings in retirement plans right from the budding age to accumulate the savings over a period of time which in turn will fetch you with a steady regular income after the age of retirement.
One has to take the rate of inflation (general rise in the level of prices of commodities) into consideration before choosing the retirement plans. Your investment should be able to beat inflation as the high rate of inflation will eat the value of your money over a period of time.
Benefits of Retirement Plans
• Regular Income for life- Retirement plans provides regular income for individuals post-retirement till death. One can easily rely on the pension amount to meet the end-to-end expenses from these retirement plans which you receive post-retirement.
• Back-up Fund - Retirement plans will act as a backup fund apart from the regular savings which an individual would have done during the period of employment. One can always rely on these funds to meet the requirements.
• Tax Benefits - Investors can claim for tax benefits if they choose to invest in pension plans. An investment amount of Rs 1,50,000 per annum is eligible for tax exemption under the Income Tax Act of Section 80C.
• Security for Spouse - In case of death of the individual investor, then his/her spouse will be entitled to get the invested amount in the pension scheme along with the accumulated interest amount.
The country's largest public sector lender - State Bank of India has various retirement plans which offer an array of benefits to the individuals in their ripe age.
State Bank of India under SBI Life Insurance umbrella provides three retirement schemes namely
SBI Life - Saral Pension
SBI Life - Retire Smart
SBI Life - Annuity Plus
Let us see in detail about the plans offered by SBI.
SBI Life - Saral Pension
This is an individual, participating, non-linked, traditional pension plan from the house of SBI.
Saral Pension policy provides the following benefits:
• Security - The accumulated corpus will meet your retirement needs.
• Reliability - The policy is reliable with simple reversionary bonuses. Guaranteed simple reversionary bonuses for the first five years for in-force policies:@2.50% for the first three years and at 2.75% for the next two years.
• Flexibility - The policy provides the holder flexibility through deferment of vesting date or extension of the accumulation period. An investor can extend the accumulation period or defer the vesting date, in case if he/she is below 55 years of age to build the retirement corpus. The maximum extended period will be up to the age of 70 years.
|Age at Entry||18 years||"Single Premium:65 years Regular Premium: 60 years|
|Age at Vesting||40 years||70 years|
|Policy Term||"Min - Single Premium: 5 Years For Regular Premium: 10 Years"||40 years|
|Sum Assured||Rs 1,00,000||No Limit|
|Premium Frequency||"Single/ Yearly/ Half-Monthly/Monthly Premiums for various modes as percentage of annual premium are: Monthly Premium - 8.4% of annual premium Half-Yearly Premium - 50.2% of annual premium"|
|Premium Amount||Rs 7,500 per annum||No Limit|
SBI Life - Retire Smart
This is a non-participating unit linked pure pension plan.
Retire Smart provides the following benefits:
• Security - It provides security to the investor by safeguarding the retirement years.
• Reliability - The plan is reliable as the retirement corpus is assured.
• Flexibility - an Individual investor can pay premiums regularly or for a limited period of time. An investor can extend vesting age as per his/her changing requirements and can choose the pay premiums as per the financial capabilities.
• Maturity/Vesting Benefits - Post the completion of policy, the investor will be eligible to get the Higher of (Fund Value Plus Terminal Addition or 101% of total premium paid).
|Age at Entry||30 years||70 years|
|Age at Vesting||40 years||80 years|
|Policy Term||10,15 to 35 years (both inclusive)|
|Premium Paying Term||Regular Premium - Same as policy term Limited Premium: 5/8 years - Policy term of 10 years 5/8/10/15 years - Policy term of 15-35 years (both inclusive)|
|Minimum Premium Amount (X100)||Premium Frequency||Regular Premium||Limited Premium|
|Yearly||Rs 24000||Rs 40000|
|Half-yearly||Rs 15000||Rs 20000|
|Quarterly||Rs 7500||Rs 10000|
|Monthly||Rs 2500||Rs 5000|
|Maximum Premium Amount (X100)||No Limit|
SBI Life - Annuity Plus
It is a traditional, non-participating immediate annuity plan.
Annuity Plus provides the following benefits:
• Security - The investor gets steady retirement income.
• Reliability - Get fixed annuity/pension throughout your life.
• Flexibility - Earn comprehensive range of annuity options. Enjoy the option of advancing your annuity and receive periodic income as per your preference.
• Lifetime income with Balance Capital Refund: Annuity is payable at a constant rate throughout the life. On death, the Balance capital (in case positive) will be paid.
• Lifetime income with Annual Increase of 3% or 5%: Annuity payout increases at a simple rate of 3% or 5% p.a. for each complete year and is payable throughout the life of the annuitant. All future annuity payouts cease immediately on death and the contract terminates.
• Get Lifetime income with a certain period of 5, 10, 15 or 20 years and life thereafter:
• The annuity is payable at a constant rate for a minimum fixed period of 5, 10, 15 or 20 years; and for life thereafter.
• The investor can choose for lifetime annuity for self as well as for the spouse, children, parents, siblings, parents in law.
• The investor has the flexibility to choose the kind of annuity payouts either on the monthly, quarterly, half-yearly or yearly basis.
• The investor has the option to advance the annuity payouts.
Life Annuity(For Two lives): The annuity payout will continue at a constant rate, throughout the life of the annuitants. You may choose from below options:
• Life and Last Survivor - 50% or 100% of income.
• Life and Last Survivor - 50% or 100% of income with Capital Refund.
|Age at Entry||0 years for product conversation |
40 years for all other cases
Maximum difference in age of Annuitants in case of Joint
Life Options: 30 years
|Annuity Payout (per installment)||Monthly: Rs 1,000 |
Quarterly: Rs 3,000
Half-Yearly: Rs 6,000
Yearly: Rs 12,000
|Annuity Payout Mode||Monthly, Quarterly, Half-Yearly, Yearly||-|
|Premium Amounts||Such that the minimum annuity installment can be paid||No Limit|