A retirement plan is a financial arrangement designed to replace employment income upon retirement.
A pension is a contract for a fixed sum to be paid regularly to a person, typically following retirement from service.
As the name suggests the intent of the plan is to provide regular income post retirement as most of us work in private organization hence, not supported financially after retirement.
It is not difficult to understand that the bigger the premium paid today, the bigger will be the corpus created at retirement and bigger will be the pension amount.
A proper planning of pension amount is required to ensure that lifestyle doesn’t fall too much after one stops working.
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