The most important reason for planning exclusively for retirement is the change in the fabric of the family structure. With the nuclear family structure becoming the norm these days and most children moving away from their families to pursue professional goals, the emotional and financial support that came with a joint family structure has diminished. It is therefore essential for individuals to have a retirement plan that gives them financial independence.

According to data from the World Bank, in 2019 life expectancy for India was 69.7 years—almost 15 years more than what it was in1980. A longer lifespan is great news, but it also means that much more planning is now required to sustain post-retirement living expenses.

Plan for retirement
The first step that one needs to take towards planning for a hassle-free retired life is to visualise how life after retirement is likely to be. This exercise will help one get a sense of the approximate amount of income needed. This is the target amount that one needs to accumulate at the beginning of retirement.
The second step is to look at one’s existing savings and project how much they are likely to grow by the time one retires. The gap between the target and the current amount is what needs to be bridged through a retirement-specific plan.

The third and the final step is to identify a retirement-specific savings plan that is aligned to one’s risk appetite and other relevant considerations.
Annuity products offer guaranteed regular income which lasts for the entire life of the annuitants, no matter how long they live, enabling them to lead financially independent retired lives. Products like these come with a wide range of options like joint life annuity.

The writer is head of products, ICICI Prudential Life Insurance Company