What are the parameters to keep in mind while choosing a pension plan?
The savings potential depends on the financial commitments and income of the individual
What are the parameters to keep in mind while choosing a pension plan?
Pran Mehra, Delhi
Your present age, your savings potential, the deferment period and the amount of pension that you are targeting to earn by the time you retire are the key elements that you should keep in mind. If a 25-year old person wants a monthly pension of Rs 5,000 by the time he turns 50, he should have the potential to save enough to be able to get that kind of a return. The savings potential depends on the financial commitments and income of the individual. The deferment period is also important. A 25-year old person has a deferment period of 35 years to save for the pension. But if he decides to take a pension plan at the age of 50, then the deferment period is only 10 years and he will need to plan differently.