Why Pension is important at old age ?

December 22, 2013

MUMBAI – In this city known for Bollywood, rich people, lots of celebrities, expensive cars and lot other things, the happiest people are those with a pension and those too young to understand how pension works, according to India’s first-ever national happiness survey carried out by HelpAge India, India Ranks 73rd in elderly care.

The inaugural survey looked at World’s Citizen. Yet the result offered a true lesson, the main one being the importance of guaranteed income in retirement. Owning a house also helps, reinforcing what is commonly called the American Dream. The highest happiness readings came from pensioners aged 65-69, who scored 7.8 on a 10-point scale. But all pension-collecting age groups scored at least 7.6—ahead of every other age group save for teens, who generally haven’t yet experienced financial stress and also scored 7.8.

          Pensions that provide guaranteed income have become increasingly rare around the world, as employers have shifted from defined benefits plans to defined contribution plans. But many of today’s retirees enjoy the old-style plans, which play into their elevated happiness reading. Studies in the U.S. have shown that retirees with a guaranteed income stream are more confident about their financial future.

          Different experts have different opinions about pension plan but no one can definitely tell you the exact amount you will get as pension, if you invest “X” amount. There are many reasons for the same like inflation, declining interest rate and many more. Having a guaranteed lifetime income is more important than anything. Direct equity, SIP, ELSS, mutual funds, stock & debentures, company bonds, etc; These are the famous options available in the market but none can offer guaranteed returns. Best of Certified Financial planners, Investment advisor, Finance Analyst suggest LIC as one of the most reliable venue for building retirement corpus and regular income. I am one of them. LIC has so many different options with better liquidity compared to any other investment sector.  - Ahmed Shaikh ( LIC Agent )

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