A bigger home, a better car, your children’s admission to the best college, or financial stability during your post-retirement years – sometimes your financial goals may seem challenging. However, achieving your goals is simple when you have the right plan to help you manage your money. There lies the significance of financial planning. Let us find out about financial planning and its importance to grow your wealth.
What is Financial Planning?
Financial planning helps you create a step-by-step roadmap to meet your financial objectives in the future, keeping in mind your current income and investments. Financial planning gives you better control over your income by:
- Properly defining your financial goals
- Managing your expenses & taxes, and
- Investing efficiently
Why is Financial Planning Important?
Education is becoming increasingly expensive. With prices rising every year, these costs will only go up in the future. You can use a children’s education calculator to understand the amount of funds required for your child’s bright career. A good financial plan will help you build up the amount required by the time your child is ready for college. A ULIP plan like ICICI Pru Smart Kid1 is a viable solution. It offers:
- Financial rewards2 for staying invested for a longer duration
- Returns3 at the end of the policy term to fund your child’s education
- Life cover4 offering lump sum payout to cover your child’s expenses in case of an eventuality during the policy term
- Waiver of premiums in case of an unfortunate event before the maturity date
Everyone wants to be financially independent after retirement. Thus, you must ensure you have enough funds to cover future expenses and fulfil your post-retirement dreams. A retirement plan offering regular income ensures financial security even after your pay cheque stops. With a retirement planning calculator, you can review how much to invest to build enough funds for a comfortable retirement. When you start investing early, you get a head start for achieving this goal.
Managing your money is essential to achieve important financial milestones. A financial plan helps you prioritise your important life goals and estimate the funds needed to achieve them. It also helps with getting significant returns on your money within the time-frame available for fulfilling your goals.
Taxes form a significant part of your expenses every year. Hence, it is necessary to make the right investments that help with saving taxes5. With financial planning, you can identify such tax-saving investment options that match your savings goals as well.
With careful money-management, you can keep aside a nest egg worth six months’ salary. It can be useful in case of unforeseen expenses. Financial planning keeps you ready for uncertainties so that financial emergencies do not derail your savings or affect your living standards.
Thus, the significance of financial planning is the clarity it gives on managing your money effectively, improving your financial well-being.
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1 Unit Linked products are different from traditional insurance products and are subject to the risk factors.
The premium paid in ULIPs are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/ her decisions. ICICI Prudential Life Insurance is only the name of the Life Insurance Company and Smart Kid Solution is only the name of the unit linked insurance contract and does not in any way indicate the quality of the contact, its future prospects and returns.
Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the Insurance company.
The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns .
2 Wealth Booster : Average of the Fund Values on the last business day of the last eight policy quarters where Fund Value is the total value of your money that is invested in equity and debt fund of your choice.
3 Fund Value is the total value of your money that is invested in equity and debt fund of your choice.
4 Life cover is the benefit payable on death of the life assured.
5 Tax benefits are subject to conditions under Section 80C,10(10D), 115BAC and other provisions of the Income Tax Act,1961. Good and Service tax and Cesses, if any will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for more details.
ICICI Pru Smart Life UIN 105L145V06