Being a freelancer has its own perks and drawbacks. It gives you the freedom to be your own boss and at the top of your finances. At the same time, with no fixed income source, you may feel the heat to plan for your retirement. Read on to know more about tips for saving with pension plan.
The financial advisors worldwide have corroborated that the key to building a handsome corpus for retirement and making the most of the investment in pension plans is to start early. When you start investing in a pension plan from a young age, you give yourself and your money sufficient time to grow and you have a better chance of accumulating a robust corpus.
However, saving alone is not enough. As a freelancer, you may not have a regular income source, so it is vital to devise a plan and make your savings grow. Here are a few tips that to investing in pension plan so that you secure your post-retirement life financially.
When you are young, the last thing you would want to think about is your retirement. But, you may soon realise that you are in your mid 30’s and you have no clue about how your retirement is going to look like? So, it is best advised to start planning about the retirement in your 30’s so that you have plenty of time to build a corpus. Besides, being a freelancer, you may want to make the most of your investment in the pension plan. When you start early, you can invest a small amount consistently without out feeling the financial pinch even during the lull period and yet be on tract to save for the future.
Just as it is important to start early, it is paramount to have a definite goal. You must decide exactly who much returns you want to get from your pension plan. This will help you choose the right investment too. Based on your current lifestyle, your future plans and liabilities, you must decide how much corpus you want to build. So, before you frantically start looking for the best pension plan, determine a goal and plan accordingly so that you the best chance to fulfil your retirement goals.
Once you know your goals, choose the right investment option. Many retirement planning experts suggest establishing a diverse investment portfolio. For example, you can invest a fixed amount every month in an equity-oriented mutual funds. And, since the returns on equity funds are market-linked, you can balance the risk by investing in safer and secured options like government bonds or other government schemes like PPF (Public Provident Fund) or NPS (National Pension System).
When you retire, it is natural that your income will reduce. And, without sufficient savings it may be difficult to meet your regular expenses. So, to avoid such a situation, you can invest in pension plans like NPS that offer monthly income in the form of pensions after you attain the retirement age. There are also other options like Monthly Income Scheme and Senior Citizen Savings Scheme, etc. The best thing about these plans you can invest a small amount over a long period to get valuable returns post-retirement. As a freelancer, these schemes would perfectly suit your need as you need not struggle with the contribution even during extended low-work period.
