Why Is Fixed Deposit Retirement Planning Important

HomeFinanceWhy Is Fixed Deposit Retirement Planning Important

The majority of individuals look forward to retirement. Everyone likes the thought of spending their time at a place where they can rest, rejuvenate, and do the things they enjoy. While it’s wonderful to fantasize about your golden years, it’s much more important to take action to make them a reality. As a result, retirement planning is essential.

You must invest and expand your existing income to secure a pleasant post-retirement existence, as depending just on your savings will not be enough. Fixed deposits have always been the preferred investment option for retirees among the several options available.

What is a fixed deposit (FD) and how does it work?

A fixed deposit is a bank-issued investment and savings vehicle. To open a fixed deposit, you must make a one-time lump-sum deposit for a set period. This period might last anything from seven days to ten years.

The money is subsequently invested and earns interest at the fixed deposit interest rate set by the bank for the specific financial year. The individual who opened the fixed deposit has the option to withdraw the funds at the end of the term.

Is an FD a suitable investment for retirement?

An FD’s operation is straightforward. You invest a specified amount of money and receive returns based on fixed interest rates after some time. The simplicity of FDs enticed most wage workers to use them as a retirement vehicle. Anyone who qualifies might start a savings account at their local bank and earn interest with little to no effort. Furthermore, the interest rates appear to be enough for the majority of ambitious retirees.

However, foreign direct investors often overlook India’s shifting inflation rate. So, by the time you get your FD returns, you’re probably just getting 1% to 2% higher yields adjusted for inflation, which is approximately the same as leaving your money stagnant.

How can you secure a steady income once you retire?

FDs may appear to be the safest option because they are unlinked and unaffected by market hazards. However, as you are well aware, they do not provide sufficient returns to support 20 to 30 years of your post-retirement existence.

What you require is a more successful retirement plan, one that provides more advantages than a savings account while being as safe as possible. Because it delivers better returns and can be customized to meet your changing requirements, a Monthly Income Plan may be the ideal retirement plan for you.

A Monthly Income Plan, like an FD returns, is a non-linked investment instrument, thus there’s no risk of losing money. But wait, there’s more. A Monthly Income Plan is designed to provide you with a consistent monthly source of fixed income, allowing you to easily manage your finances.

Life insurance, as you may know, is a way of providing financial support to your loved ones in the event of your death or physical disability.

Why should you consider a Guaranteed Monthly Income Plan as a retirement companion?

For the following reasons, Monthly Income Plans in India are a true companion for your retirement needs:

  • Monthly income with a high rate of return.
  • To protect your loved ones, there is a built-in life insurance policy.
  • Customizable and adaptable to your changing requirements.
  • In case of an emergency, you have the option of taking out a loan against your insurance coverage.

You may find it difficult to manage your life with the money you have if you have not planned your retirement with the correct programs. As a result, you may have to rely on others to fund your bills. To prevent this situation, it is critical to prepare for your retirement with the appropriate strategies. Retirement planning might assist you in amassing sizable money for your retirement years.

What you should remember while investing is to develop a substantial retirement corpus that will benefit you in your retirement years. For many people, the prospect of retiring may be a source of anxiety. Retirement may be frightening, if not terrifying, for those who have spent most of their lives generating a steady salary regularly. The one notion that comes to most people’s minds once they retire is preserving their pre-retirement lifestyle. While it may appear frightening, it does not have to be. Retirement is simply another stage of life that, if well planned for, may provide a great deal of serenity and satisfaction.


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