What Is The Best Retirement Plan For The Self-Employed?

Written by : Knowledge Center Team

2021-06-14

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On a general note, for self-employed people, there are several planning errors in terms of savings and retirement they make. To enjoy a peaceful and stress-free life after retirement is a dream that many people look forward to. With the help of the best retirement plan, one gets financial security once they retire from their work life. Retirement plans are life insurance plan that allows you to save and grow your wealth to meet your future financial goals. Based on your job profile and lifestyle, you can select your retirement plans.

4 Best Retirement Plans for the Self-employed by Canara HSBC Life Insurance

Buying the best retirement and pension plan will provide self-employed professionals financial security. People who are employed get life insurance coverage from their employers or they buy it on their own. Self-employed people consider buying a retirement or life insurance plan as a financial burden because their income isn’t fixed. Retirement plans will help you devise your insurance plan and help you live a worry-free retired life.

1. Pension4Life

With the Pension4Life Insurance plan by the Canara HSBC Life Insurance, you can save a surplus amount with the help of an annuity. They provide seven different annuity options for you to choose from. Apart from that, the plan offers guaranteed lifetime income, which is directly credited to your bank account. It builds a safety net for the family in case the policyholder passes away with return of purchase price.

2. Guaranteed Income4Life Plan

Guaranteed Income4Life is a non-participating, non-linked individual insurance savings and security plan. Both long-term and short-term financial objectives can be met through its guaranteed payouts as well as monthly income. It is a highly customisable life insurance plan that offers flexibility in terms of premium payment options and payout options. You can meet post-retirement expenses using the monthly income you receive from this savings plan.

Know more about Guaranteed Income4Life.

3. Guaranteed Savings Plan

Guaranteed Savings Plan provides options to pick your savings as well as guaranteed rewards. Your goals can be easily managed through the regular savings enabled by this life insurance plan. Even during times of emergencies or mishaps, these savings will help you strive and reach your goals.

4. Invest 4G

Canara HSBC additionally provides a Life Insurance Plan to protect your family members in the event that you die unexpectedly. It is a unit-linked insurance coverage savings plan that you may customize to meet your own goals and objectives. Because of an unparalleled combination of Portfolio Management Options and flexibility, this package enables you to leverage your investment and coverage needs.

Under this plan, you can choose a scheme which suits you the best, from the varied options that they provide. The income on retirement is directly credited to your bank account. This saves you a lot of time and effort and helps you efficiently address your needs. You can choose on the period of your annuity installment, yearly, in three months, or half-yearly.

Why is it Necessary to have a Retirement Plan for Self-employed?

Having a retirement plan is necessary to live a financially peaceful life post-retirement. As long as you are collecting your monthly paycheck, it is easy to pay your expenses. However, after you retire, you must have enough money set aside to live comfortably for the rest of your life. Taking care of your expenses even after retiring is not as difficult as it seems.

How to Prepare for Retirement?

It is important to note that many people fail to prepare for retirement because they begin too late. Instead, the best course of action is to start with what you have and make up the difference later. On the other hand, if you wait for an "opportune" moment, it will be too late by the time you begin.

Another explanation for not starting is that a large portion of one's income is always spent maintaining one's current lifestyle, such as shopping and television binges, leaving less room for retirement. While it is impossible to deny the necessity of meeting immediate needs, finding a balance between the two is necessary.

1. What is your estimated retirement age?

Based on the age you are planning to retire on, you can understand the amount you need to save. Someone planning to retire at the age of sixty might need to save more savings than a person planning to retire at seventy-five.

Every individual decides their estimated retirement age, depending on their family size, income, and work capacity. But one must consider that there can be surprises in life, and there can be a great change in this estimated time frame.

Understand your monthly expenditure: This should involve all the expenditures you might be making every month, such as grocery, light and gas bills, electricity charges.

Your personal needs: Do you aim to sit on your sofa and do nothing once you retire? Well, we hope not. It would be best if you tried to estimate the cost you would be willing to spend on yourself. This can also include your luxury plans, outings, and even travel trips!

Your family's needs: Take into consideration the requirements and expectations your family might have from you. For instance, include the tuition fee of your children here.

It is not that difficult to understand the average monthly need of you and your family. Calculate and understand this cost. Based on this, you must choose your retirement insurance plan.

2. Develop a saving plan

You decide on a saving plan for yourself and stick to it. The amount may be as small as a thousand rupees. As your income increases, your savings may increase.

Being self-employed, the income may differ. However, you must stick to a minimum saving amount that you decide on.

3 Typical Mistakes while Choosing the Best Retirement Plan

Being used to earning for an extended period in your life, isn't it scary to stop the incoming money and depend on other sources? Everyone can't be dependent on someone else to earn and feed them the rest of their lives. To rely on others for your safety, food, security, healthcare is not possible. Hence, choose the best retirement and pension plan by avoiding the following 3 common mistakes:

1. Underestimating your cost of living would be the first one to rank this list. Not buying adequate life insurance cover may not help you in future. You need to understand that once you retire, you will no longer get your monthly income. Hence, calculate your expenses wisely and take inflation into account while figuring it out.

2. You are not considering the risks involved in your investment pattern. For example, inflation. As time passes, the price of things and commodities will also keep rising. So, you need to calculate the amount that you need every month to maintain your current lifestyle in your future.

3. It would be best to choose a flexible portfolio to change plans, as per your requirements. There are a lot of saving plans that offer you the option to manage your portfolio to boost your investments. Explore the available plans before making any decision.

Remember, being self-employed, you might not be receiving any benefits from any company you worked for or from the government. You are your employer. Also, understand how scary dependency on others can be. Hence, it would be best to take care of your future as you do of your present. You must invest regularly and save for your retirement to enjoy a happy old age. This is where the retirement and pension plans come in. It is essential in many aspects such as to lead a retired life, stress-free, to have a tax saving component in your portfolio, to reduce unnecessary expenditure in your early life, to watch small minimal savings grow to an immense amount and to earn higher interest on your money.

What is Immediate Annuity?

What is the right age to buy an annuity plan?

Retirement - Top Selling Plans

We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.