How does a retirement plan primarily benefit an individual?

A retirement plan primarily benefits an individual by ensuring there are adequate funds for retirement. The main objective of such a plan is to help individuals save and invest over time so that they accumulate a sufficient amount of money to support their lifestyle and expenses once they stop working. This involves long-term financial planning, where individuals contribute to their retirement savings throughout their working years.

By focusing on ensuring adequate funds for retirement, individuals can have greater peace of mind knowing that they will be able to cover essential costs such as housing, healthcare, and daily living expenses during their retirement years. This planning helps to mitigate the risks associated with outliving one's savings, inflation, and other unexpected financial challenges in retirement.

The other options do not capture the primary purpose of a retirement plan as effectively. Increasing immediate income may be a goal of other financial strategies but is not central to retirement planning. Early withdrawal of funds can actually undermine a retirement plan by reducing the amount available for future needs. Providing life insurance coverage is important, but it serves a different purpose in financial planning, primarily focusing on protecting dependents rather than ensuring retirement funds.