Planning to retire at 55 -- How can I secure Rs 75,000–Rs 1 lakh monthly pension?

I am a 44-year-old professional. While I haven’t fully decided yet, I am targeting retirement around the age of 55. In this scenario, I am looking to make an investment that can provide me with a monthly pension of ₹75,000– ₹1 lakh post-retirement. Any recommendations?

Advice by Satishwar B., MD and CEO, Bandhan Life

This is a great question, and a relevant one too. One that many professionals in their 40s are now beginning to ask. With retirement still over a decade away, you’re in a strong position to plan ahead and build a financial cushion that gives you both freedom and peace of mind in your next chapter.

Since you’re aiming to retire around 55, you have 10 valuable years to accumulate a retirement corpus. Once you retire, you can convert that corpus into a steady monthly income, or pension, through the right annuity option.

Let’s break this down into two phases: Accumulation and Income.

Phase 1: Building Your Retirement Corpus (Now to Age 55)

During this phase, your focus should be on growing your wealth steadily, in line with your risk appetite. Here are two options to consider:

1. Unit Linked Pension Plan (ULPP)

A market-linked pension plan helps you grow your retirement savings while also offering tax benefits and a life cover. Here's how it works:

· You pay premiums regularly, and the money is invested in funds—equity, debt, or a mix, based on your risk profile.

· Over 10 years, your investment grows with the market, helping you build a sizable corpus.

· On maturity, you're allowed to withdraw up to 60 % of the corpus as a tax-free lump sum (under current laws) and use the remaining amount to purchase an annuity plan, which will then give you an income (monthly, quarterly, half-yearly or annually) based on your requirement. It is advised to choose funds wisely and review them regularly, as unit linked pension plans are market-linked and the final corpus and pension amount will depend on fund performance.

Bandhan Life iInvest Pension, available on bandhanlife.com, is one such market-linked pension plan that further maximizes your linked returns with zero allocation or admin charges.

2. Deferred Annuity Plan (Non-Market-Linked)

If you’re looking for more predictability and stability, you can also consider a deferred annuity plan. Here’s how it works:

· You pay premiums for a few years (say, 5–10 years).

· The annuity payouts are deferred—they begin at a future date you choose, like age 55.

· Once payouts start, you receive a fixed monthly income for life.

The advantage of a deferred annuity is that your monthly income is pre-defined, which gives you more confidence in your retirement planning, even if markets fluctuate. You simply need to make an effort and invest now for a couple of years and reap the benefits in the form of a regular income when you need it the most.

Phase 2: Generating Monthly Income (Post-Retirement)

Once you reach retirement age and have built your corpus, the next step is to convert it into a monthly income stream.

You can use the maturity amount from your unit linked plan (or other investments) to buy:

· An immediate annuity plan, where payouts begin right after purchase.

· Or a deferred annuity, where payouts begin after a chosen deferment period.

Choose a plan that offers a monthly payout between ₹75,000–₹1 lakh, depending on your corpus. Today’s annuity calculators can give you a rough idea of how much you need to invest now to achieve this income goal in 10 years.

Things to Keep in Mind

· Don’t Delay Further: With around 10 years to your retirement goal, this is the right time to start building your retirement corpus. The sooner you begin, the more manageable your investment amounts will be—and the better chance you have of achieving your target monthly pension.

· Consider Inflation: A pension that feels sufficient today may fall short 10–15 years later. You may want to look at annuity options that offer increasing payouts over time.

· Balance Safety and Growth: Use a mix of market-linked plans for growth and guaranteed annuity products for security, so you’re not overexposed to market volatility.

· Tax Implications: Sixty percent of the corpus from pension ULIPs can be withdrawn tax-free; the rest, when used to buy an annuity, can result in taxable income depending on your tax regime and other income. Plan accordingly.

Final Thoughts

You’re doing the right thing by planning at the right time. With 10 years to go, you have time to build a retirement plan that combines market-linked growth with guaranteed income. Whether you choose a Unit Linked Pension Plan, a deferred annuity, or a combination of both, the key is to stay consistent and aligned with your long-term goals.

Start today, and give yourself the retirement lifestyle you’ve worked so hard for—without financial worry.