Are you aspiring to develop a retirement corpus of Rs 1 crore in a period of 15 years but worried about your investment capacity? Do not worry. There are potential ways through which you can reach your target without any difficulty.
The only thing you have to ensure is that you are able to invest Rs 5 lakh every year for a period of at least 7 years. Yes, you do not have to invest for all the 15 years. Just invest Rs 35 lakh spread over 7 years and then reap the benefits after 15 years.
How to go about it?
There are some certain insurance plans which can help you achieve this magic number of Rs 1 crore. Let's discuss those plans here.
HDFC Life's Classic Assure Plan is one of the best plans which can help you reach your goals in a hassle free manner. Just keep paying the premium amount of Rs 5 lakh every year and you can expect a pay back of Rs 1 crore after 15 years.
We are assuming that your premium investment yields returns to the tune of 12 per cent a year. This is the average rate of return and if the returns go higher, you may end up achieving much more that Rs 1 crore.
For instance, if your insurance plan is able to generate returns of 15 per cent a year, then you can get a corpus of Rs 1.30 crore in the same period. That's the power of compounding returns. A slight upsurge can bring you great benefits.
Given the investment scenario in the Indian market, the coming years are going to be promising ones and there are possibilities that your investments bring far superior returns.
Meanwhile, during the policy premium payment period, you can claim tax benefit of up to Rs 1.5 lakh under section 80C of the Income Tax Act. That means, if your annual income falls under the bracket of 20 per cent, you will straightaway save Rs 30,000 of tax every year.
If the tax bracket is 30 per cent, then this benefit will go up to Rs 45,000 a year. When you multiply this tax saving by 7 years, which is your premium payment term, the total comes anywhere from Rs 2.10 lakh to Rs 3.15 lakh.
There are several other benefits attached to the Classic Assure Plan. Of course, since it is a life insurance plan, you will get a 'sum insured' value of Rs 25 lakh and death benefits of around Rs 50 lakh.
What are the other options?
If you wish to reduce the period of pay out, then you have one more option which is a good one. HDFC Personal Pension Plan is the plan which can bring you Rs 1 crore in a period of 10 years. Just that you have to pay the same amount of Rs 5 lakh for 10 years. That means when you pay Rs 50 lakh spread over a period of 10 years, then you can receive an amount of Rs 1 crore.
Are there any further advantages?
The above plans make a great proposition given the fact that you do not have to do anything. Just invest and get returns after a certain time period. It is unlike stock markets or mutual funds where you have to keep an eye over your investments.
If the stock market is going bad, you have to exit from the market at the right time. But with the aforementioned insurance plans, you do not have to worry about the market movements.
That's the kind of peace and smooth ride you can expect. Plus there are benefits attached to life insurance.
These plans bring a complete package for you. You are able to secure your retirement plus your family's financial profile in case you go through a severe incident of death. The plans help you fulfill your responsibilities in a much more prudent manner.
So why to put your dreams at risk and go for risky investment in stock markets and other instruments? You can go for bank instruments but the downside is that you do not get tax benefits and life risk coverage. Also, the returns are quite average at 8-9 per cent a year.
Today, with the reforms in the insurance market, life insurance plans are more of savings driven investment plans than just risk coverage tools. Choice is yours!
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