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Old 10th June 2010, 15:25   #181
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Originally Posted by aargee View Post
Yes you're very true; I don't know (and wish not to know) anything on pension policies as I like to handle the money by myself rather than handing it over to someone who will provide me peanuts after 20 years!!!
The point is that apart from income coming through your assets (house rents, FD etc) you also need some fixed quantum coming home through a structured means. Hence it helps to invest in Pensions too. Its just the distribute it accordingly after you account for inflation.

I agree that you may not get high returns, but some sanity does prevail.
Some order amongst chaos.
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Old 10th June 2010, 15:38   #182
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Originally Posted by ampere View Post
Hence it helps to invest in Pensions too. Its just the distribute it accordingly after you account for inflation.

I agree that you may not get high returns, but some sanity does prevail.
Some order amongst chaos.
Can you elaborate on Pensions - I know very little about. I always thought pension plan is good only for a group (group pension plan) or if you are a senior citizen & need a fixed monthly income.

At what age, can/should one invest in a pension plan? How does it work & what kind of returns can you expect?
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Old 10th June 2010, 15:56   #183
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Originally Posted by carboy View Post
Can you elaborate on Pensions - I know very little about. I always thought pension plan is good only for a group (group pension plan) or if you are a senior citizen & need a fixed monthly income.

At what age, can/should one invest in a pension plan? How does it work & what kind of returns can you expect?
Pension plan can be started at any age. Earlier the better.

There are a couple of plans ( SBI and LIC---Both safe bets) which are almost identical that i am contemplating.

I am briefly highlighting the plan, there could be a little in-accuracy as I dont remember the exact tenure/ final amount details.

You invest 5 Lakhs ( 1 Lakh each year)

1 Lakh/Annum can be paid quarterly, half yearly or annually.

After 5 lakhs is paid, you wait for 5 years.

11th year onwards, you will get a monthly pension of Rs.15000 ++ until 18 years (8 years in total)

At the end of 18 years, you will get a lumpsum amount of some 18 Lakhs or something.

It would be nice to know views here if it's a good plan?
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Old 10th June 2010, 16:03   #184
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Quote:
Originally Posted by carboy View Post
Can you elaborate on Pensions - I know very little about. I always thought pension plan is good only for a group (group pension plan) or if you are a senior citizen & need a fixed monthly income.

At what age, can/should one invest in a pension plan? How does it work & what kind of returns can you expect?
I would say start with 15% of the salary for a pension plan. Be aware low return but more for safety. For that matter you can have it on non-unit linked.


Let me ask a question, what are sources at old age:

1. Pension
2. Rents for Properties
3. Interest from Bulk Cash (PF/PPF/Gratuity/Assets)

(If anything, folks please add)

One thing that I learnt from an LIC agent:

Compassion increases with age, towards loved one. In the heat of this
moment, one may be tempted to give away chunk of bulk cash (to
son/daughter/grand-kids). If that happens lots of options from #3 get
weaned away. What then is left is 1 and 2.

Also need proper plan for medical expense for that age.
Hence the need for a stable income.

Last edited by ampere : 10th June 2010 at 16:09.
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Old 10th June 2010, 16:36   #185
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Just this morning I saw and ad for ICICI pension scheme. You pay 2k per month for 30 years. After that you get 15k+ for the rest of your life (donno if there is any cut-off). What use would be 15k, 30 years down the line? I suppose it would be less than what 2k is worth today.
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Old 10th June 2010, 16:54   #186
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Quote:
Originally Posted by mobike008 View Post
Pension plan can be started at any age. Earlier the better.

There are a couple of plans ( SBI and LIC---Both safe bets) which are almost identical that i am contemplating.

I am briefly highlighting the plan, there could be a little in-accuracy as I dont remember the exact tenure/ final amount details.

You invest 5 Lakhs ( 1 Lakh each year)

1 Lakh/Annum can be paid quarterly, half yearly or annually.

After 5 lakhs is paid, you wait for 5 years.

11th year onwards, you will get a monthly pension of Rs.15000 ++ until 18 years (8 years in total)

At the end of 18 years, you will get a lumpsum amount of some 18 Lakhs or something.

It would be nice to know views here if it's a good plan?
What is the name of the plan?
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Old 10th June 2010, 17:06   #187
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I learnt the virtues of saving quite early in life and have found it quite rewarding! During my post-grad I saved a bit of money (about 10L) from scholarship/internship earnings that I put into buying a decent house in my hometown (added 5 more, those were my father's contribution) when prices were still within limits and is presently used by parents (earlier we always lived on rent all our life). The same house (4+ years now) is worth more than 2.5x the investment. Also always very religiously followed 30% rule - 30% salary goes in tax (in my case), 30% I HAVE to save every month, and 30% can be enjoyed/dispensed with! Never ever broke this rule. So basically I had a few SIPs in good MFs that ensured that 30% was always invested. Same investment (over 4 years now) is again worth more than twice in value (and it has seen the best and worst of market in these 4 years). Rest 10% I invested in PPF and stocks! dabbled in stocks and whever made any money (sometimes I did make some good money) I used that to buy anything I liked. Got married also in between and had a honeymoon at a very exotic international location from my own savings. And got fired from my job last year (was jobless 4 more than 8 months) and was still able to maintain same lifestyle without touching any of my savings! I have no liabilities as such that I have made sure. No house loans, no vehicle loans etc. I do maintain a CC and used it quite often (for the convinience it offers) but have never defaulted and always pay in full (so no interest charges etc). I have everything at home that I like/want/should have..

I guess a little bit of planning does help a lot and goes long way in ensuring you are worryfree in life. And its never late to start planning and properly saving in life. I think my motivation for saving early in life was that famous lines from David Copperfield (Dickens): Earnings 1 pound, Expenditure 90 cents -> happiness; Earnings 1 pound, Expenditure 1.1 pound -> ruin! It was something like that. Dont remember exact thing too well.
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Old 10th June 2010, 17:19   #188
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^^joslicx: Really cool way of living life. No big loans to pay, had savings from early times and you bought a house, and now living a cash-rich life!
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Old 10th June 2010, 18:42   #189
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@joslicx - Count me in your life style except for...
1. Started savings only after 3 years of work
2. Reduced monthly expenses to a great extend
3. Savings of about 45%
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Old 11th June 2010, 20:28   #190
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Originally Posted by pramodkumar View Post
What was their problem, they were in the rat race, and cannot get out of it their whole life. They had decent assets in their home town and had every luxury a middle class family could dream about but their lifes were mechanical. So what did i learn from them, Live your life, but i am finding problems like where to draw the line.
As vivek said earlier in this thread, don't go from one edge to another. Hope this thread will not take you back to the other edge.
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Old 11th June 2010, 20:52   #191
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And got fired from my job last year (was jobless 4 more than 8 months) and was still able to maintain same lifestyle without touching any of my savings!
Thats indeed a good feat but did you mean without touching your investments? If you didnt touch your savings, how were you managing your expenses without a salary? Unless ofcourse you have other sources of income(interest from FDs etc)
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Old 11th June 2010, 21:00   #192
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Originally Posted by joslicx View Post
During my post-grad I saved a bit of money (about 10L) from scholarship/internship earnings that I put into buying a decent house in my hometown
...
The same house (4+ years now) is worth more than 2.5x the investment.

Also always very religiously followed 30% rule - 30% salary goes in tax (in my case), 30% I HAVE to save every month, and 30% can be enjoyed/dispensed with! Never ever broke this rule.
....
....
And got fired from my job last year (was jobless 4 more than 8 months) and was still able to maintain same lifestyle without touching any of my savings! I have no liabilities as such that I have made sure. No house loans, no vehicle loans etc. I do maintain a CC and used it quite often (for the convinience it offers) but have never defaulted and always pay in full (so no interest charges etc). I have everything at home that I like/want/should have..

I guess a little bit of planning does help a lot and goes long way in ensuring you are worryfree in life. And its never late to start planning and properly saving in life.
...
...
No words to say..
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Old 11th June 2010, 21:46   #193
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Originally Posted by Technocrat View Post
Thats indeed a good feat but did you mean without touching your investments? If you didnt touch your savings, how were you managing your expenses without a salary? Unless ofcourse you have other sources of income(interest from FDs etc)
Well I managed from my severance package (3 months salary + some accumulated holidays reimbursement ~ 5L after tax). My monthly expenses were in the region of 30k (15k monthly rent + 15k everything else). I still invested 30% of that every month till last month... also used some money from some good stocks that I had purchased from the 10% account! I would have still held them but then these were the times when that money was needed so... Still was in the +ve so no regrets on that... And call me a bit stupid but I have zero bank FDs!! 33% tax on interest income (as in my case) means I have always been as far from these kind of investments as from plague!!! I prefer instruments where I dont have to pay tax (risk is ok with me still young enf to ride the wave!

The interesting thing was I had a baby in this time I was unemployed! Normally the company mediclaim would have taken care of all the child-birth expenses but as I had lost my job, those were borne by me only. I realised that day one very important thing - Just having a company mediclaim policy is not enough. One should seriously look at a personal healthcare plan as well!!!

Last edited by joslicx : 11th June 2010 at 21:49.
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Old 11th June 2010, 21:54   #194
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Thanks for sharing the information, no offense but your savings or investments then didnt play any part in you being able to support yourself for those jobless months.

And +1 on the company mediclaim observation.
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Old 12th June 2010, 06:11   #195
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Came across this article on (first/second) property purchase/home loans. Source livemint.
Attached Thumbnails
Are most of us living on the edge? time to plan up things for the future.-deduction-home-loan-interestmint.jpg  

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