Top 10 Pension Plans in India: Invest Wisely, Retire Comfortably

Top Pension Plans in India: To Secure Your Golden Years 

Year by year, you’ve been working hard throughout your career, continuously earning and saving for the future. But, reality may strike anytime while you sit and calculate the numbers – will you have enough to complete your bucket list and truly enjoy your retirement years? Are you confident your savings will sustain you through the golden years? Not sure?

When it comes to retirement planning, you’re not alone in worrying about a stress-free retirement life. It’s a concern that resonates with countless individuals across India. Still, not many can plan efficiently for a financially secured retirement. We have prepared a list of the top 10 pension plans in India that will work as pillars of your retirement strategy and offer a structured approach to building a retirement corpus, ensuring peace of mind.

What are the Pension Plans in India?

Pension plans are a type of life insurance plan providing financial coverage for your old age. The right pension plan may work as a financial tool, serving stability and security after retirement. 

In simple words, you deposit a certain amount of your income into the pension scheme through a lump sum investment or regular premium payment over a period. After completing the policy tenure, you receive a fixed income during your retirement days. 

When it comes to pension plans, we often consider them a responsibility of our workplace. But getting covered under a pension scheme individually is more of our responsibility. Where you invest regularly during your employment years and develop a financial corpus that you can utilize once you retire. Let’s look into the list of best pension plans in India. 

How Pension Plan Becomes Your Retirement Buddy?

• Contribution: Individuals and employers regularly contribute money to the pension plan.
• Investment Growth: The pension fund invests these contributions in various assets to grow over time.
• Compounding: The invested money grows exponentially, generating returns on both the principal and accumulated interest.
• Tax Benefits: Pension contributions often qualify for tax benefits, allowing retirement savings more effectively.
• Retirement Payouts: Upon retirement, the accumulated funds are converted into a regular income stream post retirement.

List of Top 10 Pension Plans in India 2024

Here are some of the best pension plans available in the Indian market to invest and strengthen your golden days financially: 

*Disclaimer: RenewBuy does not endorse any specific insurance company or insurance product offered by any insurer.

Brief Details of the Best Pension Plans in India

Let’s look at the best pension plan details to clearly understand how the plan benefits you during your retirement years. 

1. Max Life Smart Guaranteed Pension Plan

Max Life Smart Guaranteed Pension Plan is a great way to secure guaranteed income as long as you live. In addition, depending on the variant you choose, you can receive the next 5 years annuities as a lump sum in advance. Once you purchase the policy, the annuity rates are guaranteed for the lifetime of the annuitant.

Features & Benefits:

• Option for return of premium on death
• Enhance the annuity amount with the top-up premiums
• Receive your income on a yearly, half-yearly, quarterly, or monthly basis
• No medical examination for the issuance of the annuity plan

2. HDFC Life New Immediate Annuity Plan

HDFC Life New Immediate Annuity Plan streamlines a regular source of income to live your post-retirement life on your own terms. The single premium paying plan has multiple annuity options to cater to your needs. Also, the annuitant receives higher annuities for a large purchase price. 

Features & Benefits:

• Receive annuity as long as the annuitant or the spouse is alive
• Return of purchase price on death or critical illness
• Guaranteed annuity rates for lifetime
• Receive annuity payouts on a monthly, quarterly, half-yearly or annual basis

3. HDFC Life Saral Pension

HDFC Life Saral Pension allows the annuitant to choose their own purchase price or the annuity amount they want after retirement. The plan provides single and joint life annuity options to secure your spouse under one plan. This way, you ensure a regular source of income for a lifetime. No medical examination is required to buy the plan.

Features & Benefits:

• Joint life feature for both partners
• Policy surrender on the diagnosis of critical illness
• Avail of policy loan to fulfil your liquidity needs
• Return of purchase price option on death

4. Tata AIA Life Saral Pension Plan

With the Tata AIA Life Saral Pension Plan, you are guaranteed a regular income during the second inning of your life. You can choose the option of a single or joint-life annuity. Also, the plan provides the death benefit depending on the option selected. If the annuitant, the spouse, or the children are diagnosed with a critical illness, they can surrender the policy after six months from the date of policy commencement.

Features & Benefits:

• Flexible annuity options to meet your financial needs
• Receive annuity payout at selected mode
• Return of purchase price option
• Avail of loan under the policy

5. Tata AIA Life Fortune Guarantee Pension Plan

Tata AIA Life Fortune Guarantee Pension Plan offers immediate annuity on single and joint life. The annuitant can utilize the regular income benefit to manage their expenses post-retirement. The nominee receives the applicable death benefits depending on the annuity option selected. Tax benefits can be availed under the premium paid and benefits received as per applicable tax laws.  

Features & Benefits:

• Multiple annuity options
• Increase savings with the high purchase price
• Increase annuity through top-up premiums
• Attach riders to enhance the benefits

6. Bajaj Life Guaranteed Pension Goal

Bajaj Life Guaranteed Pension Goal is a non-linked, non-participating annuity savings or pure risk plan for individuals and groups. The annuitant receives guaranteed regular income throughout life as per the annuity amount guaranteed at the policy inception. The policyholder can also increase the annuity through a top-up premium option. 

Features & Benefits:

• Return of purchase price on death or surrender
• Available for individual and group 
• Start receiving annuities per your requirement
• Guaranteed additions on deferred annuities

7. ICICI Pru Guaranteed Pension Plan

Launched by ICICI Prudential Life Insurance Company, the Guaranteed Pension Plan is one of the best options to secure a second source of income after retirement. By choosing the immediate annuity option under the policy, you can convert your savings into a source of immediate income. 

Features & Benefits:

• Guaranteed lifelong annuity
• Option to choose your retirement date
• Early return of purchase price option
• High purchase price option

8. Kotak Lifetime Income Plan

Kotak Lifetime Income Plan is an immediate annuity plan that guarantees a regular source of income for the annuitant throughout the lifetime. The annuitant can choose the flow of income at which they want to receive the annuities. The annuity rates decided at the time of policy inception remain fixed and will not change with the varying market conditions. 

Features & Benefits:

• 6 annuity options to choose from
• Guaranteed annuity rates for lifetime
• Higher annuity rates for a higher premium
• Discount on high premiums

9. IndiaFirst Life Guaranteed Annuity Plan

IndiaFirst Life Guaranteed Annuity Plan is designed to guarantee an income throughout the life of the annuitant. By purchasing the plan, you safeguard your family in case of uncertain death or in case you are diagnosed with a critical illness. 

Features & Benefits:

• Life increasing annuity
• Life annuity with return of purchase price on death or critical illness. 
• 5 different annuity options
• Lifetime benefit on paying a limited premium

10. LIC New Jeevan Shanti Plan

LIC New Jeevan Shanti Plan is a deferred annuity plan to secure your post-retirement by ensuring a reliable income stream throughout your life. No contribution limits exist; hence, an individual can invest more and secure higher annuities upon retirement. The annuitant can also avail of loans under the policy. 

Features & Benefits:

• Lifetime annuity on one time payment
• Incentive for higher purchases
• No medical examination
• Tax-deferred growth

**The pension plans mentioned above are shortlisted based on the high annuity rates.

Basis of Selection of the Top 10 Pension Plans in India

The table below highlights the premium income generated by the life insurance companies as per the annual report 2022-23 of IRDAI.

How Much Should You Save for Your Post-Retirement?

Retirement planning is a crucial step in the life of an earning individual. Where an individual can opt for multiple investment options, buying a pension scheme is one of the most reliable ways to streamline a regular income source. But the question arises: how much money is sufficient to save for your retirement? 

In general, saving at least 15-20% of your income for retirement days is recommended. But the right amount of retirement corpus depends on factors like age, income, lifestyle, inflation, and financial goals. Here are some key measures you can consider while deciding on retirement amount:

• Evaluate your retirement goals: Define what lifestyle you want to maintain in your retirement. Ask yourself what hobbies you want to pursue, house rent, healthcare expenses, etc. 
• Decide on when you want to retire: Some pension plans come with the flexibility of deciding your retirement date. This helps you accumulate the required amount of corpus over the years. Also, ensure that you plan for a longer retirement so you have sufficient funds.
• Calculate inflation: While calculating inflation, don’t miss out on the impact of inflation on your retirement corpus. Adjust your savings and investment strategies accordingly to cover your retirement expenses throughout the years you live.
• Calculate retirement expenses: Make an estimate of future expenses depending on the lifestyle you wish during your retirement. Remember that the costs of healthcare or other essentials rise over time, so the expenses should include those costs. 
• Identify income sources: Determine all your income sources, investments you have made, pension plans or government schemes, PF, annuities, etc. This will help you calculate the flow of money and how much more you will need. You can start investing in mutual funds, stocks, or ULIPs that offer good returns over time. 

Wrapping it Up

Investing in a pension plan is crucial to ensure financial stability during your retirement. We have provided you with the list of the top 10 pension plans in India that you can consider investing in 2024 and saving a good amount of money to live a stress-free retirement. Different plans offer different options, so individuals customize their plans to meet their needs. 

You can explore these pension schemes and compare their features, costs, and payout structure. In case you need expert assistance to understand terms and conditions better, connect with a life insurance agent nearby with the help of RenewBuy Advisor Connect. 

* Disclaimer: The information provided here regarding insurance products, companies, and other schemes is for general informational purposes only and is subject to change according to the insurer's terms without prior notice.

Frequently Asked Questions

What is the difference between participating and non-participating pension plans?

1. Participating pension plan allows policyholders to share in the investment risk of the plan, receiving bonuses or dividends based on performance. Non-participating plans do not involve sharing risks or rewards with policyholders; they receive predetermined benefits.

Which pension plan is best in India?

1. The definition of the best pension plan in India varies depending on the individual needs of an individual. Some of the best plans that an individual can opt for are: 

• Max Life Smart Guarantee Pension Plan
• HDFC Life New Immediate Annuity Plan
• Tata AIA Fortune Guarantee Pension
• Bajaj Allianz Life Guarantee Pension Goal
• LIC New Jeevan Shanti Plan

How to calculate pension funds in India?

1. To calculate a pension fund, start by determining the regular contributions made by the individual or employer and estimate the interest earned. The next factor is the annuity rate offered by the pension provider and the duration of pension payments based on retirement age and life expectancy. Using these details, you can calculate the total pension fund you will receive after retirement.

How much money is a good pension amount?

1. A good pension amount should replace around 70-80% of your pre-retirement income. For example, if you earned ₹10 lakh annually before retirement, aim for a pension that provides ₹7 to ₹8 lakh per year during retirement.

Do I need a pension plan even if I have a provident fund account?

1. Yes, having a provident fund account is not enough to back your finances after retirement. Calculating inflation, the money received from a PF will not be sufficient to cover future expenses. Investing in an annuity plan will help manage healthcare or unexpected expenses after your retirement.  

What are the best pension plans in India with a single premium?

1. You can select any of the following pension plans in India with a single premium to invest and streamline a regular payout at the time of retirement. 

• Max Life Smart Guaranteed Pension Plan
• HDFC Life New Immediate Annuity Plan
• HDFC Life Saral Pension
• Tata AIA Life Saral Pension Plan
• ICICI Pru Guaranteed Pension Plan

Can I purchase more than one pension plan?

1. Yes, you can purchase multiple pension plans from different life insurance companies per your financial requirements. 

How to get 50,000 pension per month in India?

1. To get Rs. 50,000 per month, you must invest in high-risk and low-risk instruments as early as possible in your 20s or 30s. You can also consider investing in the National Pension Scheme (NPS), which ensures good returns after retirement. 

How can I calculate my retirement corpus?

1. You can use a pension calculator to calculate your retirement corpus. Just provide the essential details like the present cost of living, inflation rate, retirement age, and expected number of years to live post-retirement. 

What tax benefits are available under a pension plan?

1. The premiums paid towards a pension plan are eligible for tax exemption of up to Rs. 1.5 Lakh under Section 80C of the Income Tax Act, 1961.