Pension Funds are company-centric in this country. That means if you work for small companies that don’t have pension funds, you may want to work out your own pension plans. Not all of us can afford to buy assets that we can rent out or sell in our old age to maintain the same lifestyle after retirement.
These are the 5 reasons why you should seriously consider having a pension plan.
1. It will boost your retirement income.
When you retire, you may not be able to do all that hustling and all that running around to look for extra cash. This means your income will significantly dwindle. A good retirement plan will boost the income you are getting from other sources in your retirement.
2. There is an option of a lump sum payout
Most or some pension schemes also provide protection in the form of lump sums and pensions to dependants in the event of a member’s death. This means, you can leave your dependants with some money for rainy days in the event of your death.
3. Pension Schemes are not taxed
Contributions made to pension schemes are not taxed. This means some of your money that was supposed to go to the government as tax goes to your fund. This means you will enjoy the tax holidays when you eventually start withdrawing from your fund.
4. Perpetual Income On Retirement
When you faithfully pay your pension subscriptions to your pension scheme, your regular contributions are invested. This means that they grow throughout your career and then provide you with an income in retirement usually paid in monthly instalments. You don’t have to worry about fixed bills ever again in life.
5. In case other retirement options fail, you will always have something to fall back on.
Some people don’t want to have a pension plan because they say they have a property they will get gratuity from that when they retire. While it’s a good investment option, we cannot rule out unexpected eventualities that mare our everyday lives. In case something happens to your primary retirement income, the payouts that come from pension plans will be able to sustain you directly or indirectly.
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