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Pension Planning for the Self-Employed

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Pension Planning for the Self-Employed
August 09, 2023

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When we’re young, we hear about the importance of saving for the future. Once we start working, we put money away for emergencies and to fulfil our future goals. As responsible adults, we understand the importance of building a corpus for retirement. Many self-employed individuals work so hard to establish themselves as professionals and invest in their businesses that retirement planning often gets left on the back burner.

Here’s a comprehensive guide to pension planning for the self-employed.

Understanding the Importance of a Pension Plan

Retirement planning enables you to secure a steady income stream in your golden years. The amount helps you maintain your desired lifestyle and meet financial obligations. Self-employed individuals do not have the security of a steady income while working, so saving for retirement is all the more crucial. The HDFC Life Smart Pension Plus Plan provides a guaranteed annuity income that safeguards your financial future. Additionally, the plan offers life insurance coverage, securing your family’s financial future after an unexpected event.

The Benefits of Planning Early

While planning your retirement, the earlier you start, the better. As a self-employed individual, early planning helps you enjoy the following benefits:

  • Long-Term Planning
    Planning your pension from your 20s and 30s provides a long investment horizon. You have sufficient time to identify the ideal plan for your requirements. Many young planners try two or three retirement and pension plans before settling on the best financial tools to achieve their aspirations.
  • Affordable Premiums
    Pension plans offer life insurance coverage. The insurance company evaluates your age, lifestyle habits and income to calculate your plan’s premium. Buying a policy in your 20s and 30s offers high life coverage at pocket-friendly premiums.

Benefits of Having a Pension Plan

As a self-employed person planning for a secure retirement, let’s better understand how a pension plan benefits you.

  • Premium Flexibility
    Plans like HDFC Life Smart Pension Plus Plan allow you to choose between single and regular premium payment options. If you do not earn a stable amount every month or year, you can save for many years and opt for a single premium payment. 
  • Lifetime Security
    The HDFC Life Smart Pension Plus Plan provides a guaranteed annuity for life at a fixed rate. You will receive the guaranteed income at the chosen frequency, enabling you to maintain your standard of living once you retire.
  • Plan Flexibility
    HDFC Life Smart Pension Plus offers four plan options. You can select one based on your unique requirements. However, ensure you do your research since you cannot change the chosen plan for the policy duration.
  • Safeguard Your Family’s Finances
    HDFC Life Smart Pension Plus has a Joint Life Annuity option. If you select this, you can safeguard your family’s finances even if something happens to you. These plans have two annuitants. In most cases, the second annuitant is the policyholder’s spouse. If something happens to the policyholder, the secondary annuitant receives the annuity payments for the rest of their life.
  • Enhanced Safety with Riders
    You can boost your family’s financial protection by selecting riders1  with your plan. HDFC Life Smart Pension Plus offers critical illness. You can choose a rider based on your personal needs.
  • Tax Savings
    Pension planning offers tax savings under Section 80C2  of the Income Tax Act. You can consult a tax advisor to understand your tax liabilities.

Many self-employed people worry about their financial future. As an independent professional, you must take charge of your finances and start planning for the future today. Pension plans enable you to secure your retirement with guaranteed annuity payments. Ensure you thoroughly research the market to identify the ideal option based on your financial situation.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

Disclaimer

1. For all details on Riders, kindly refer to the Rider Brochures available on our website.

2. Subject to conditions specified u/s 80C of the Income tax Act, 1961.

HDFC Life Smart Pension Plus UIN:101N173V04. A Non-Linked, Non-Participating Individual/Group Annuity Savings Plan.

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