Retirement is a long-awaited time in one’s life. However, as comforting as it is, it comes with financial struggles that result from the end of income.
Retirement plans assist in giving you a steady stream of income after retirement so that you are financially independent. Pension schemes in India are created to enable retired people to achieve their financial objectives and milestones. Maintaining and regulating one’s financial future post-retirement in case you don’t hold a government job requires the use of pension plans. Reviewing some of the top pension plans in India will help you lead a comfortable retirement life.
So, without further ado, let us explore the various options you have to help you lead a stress-free retirement life.
National Pension Scheme (NPS):
The National Pension Scheme is the pension scheme implemented by the Indian government. National Pension Scheme investments are open to employees in the public, private, and unorganised sectors. However, those who serve in the military cannot invest in it. Depending on the investor’s risk level, this pension plan gives them a choice to invest in debt or equity funds.
When investing in NPS, the investor must make a lump sum contribution of at least Rs. 6,000; this contribution may be made all at once or in monthly instalments beginning at Rs. 500. The PFRDAI keeps an eye on the transparency of investment criteria. The National Pension Scheme permits investors to withdraw up to 25% of their total savings as emergency funds three times every five years.
Post Office Savings Account(SB)
India Post offers a post office savings scheme, the best saving plan under the government’s savings scheme. Given its low risk, it is one of the safest methods of investing and saving. Accounts can be started under this savings plan by a single person or by two individuals as a joint account. It is not possible to change a single account into a joint account or the other way around.
The promised money is given to the nominee in the event of the beneficiary’s passing. If one account holder of a joint account dies, the money is transferred to the name of the other account holder. SB requires a minimum deposit of 500 rupees and a minimum withdrawal of 50 rupees. There is no maximum deposit amount.
Senior Citizen Savings Scheme (SCSS)
The Senior Citizen Savings Scheme is the best saving plan for older people. A person over 60 years old may open an account under this scheme. Only spouses are permitted to open joint accounts. The only person who will get the value of the asset of a joint account is the primary account holder.
Multiples of Rs.1000 should be used as the minimum deposit amount. The maximum value that can be retained in the SCSS account is Rs. 15 lakh. The interest is taxable if it exceeds Rs. 50,000 across all SCSS accounts in a financial year, in which case TDS at the applicable rate must be deducted from the total interest earned.
Employee Provident Fund (EPF)
The Employee Provident Fund is one of the few pension programmes supported by the Indian government. Employee Provident Fund is governed by the Employees’ Provident Fund Organization (EPFO). It is available to both salaried employees and investors in Hindu Undivided Families (HUF).
Investors are required to contribute a specific amount of their base salary to the Employee Provident Fund. 10% to 12% is the current rate for the contribution made towards the account. At retirement, the investors receive the total amount invested plus interest.
Public Provident Fund Account (PPF)
A Public Provident Fund Account is one of the finest pension schemes in India. Only one PPF account per person is permissible. A single PPF account may be opened with either India Post or any other bank in the country. A Public Provident Fund (PPF) account’s interest rates are compounded every three months.
A Public Provident Fund (PPF) account can be opened with as little as Rs. 500 and as much as Rs. 1,50,000 in a single fiscal year. The account can receive deposits in the form of instalments or a single sum. Section 80C of ITA permits tax deductions for deposits made.
Planning and preparing for the future is essential, given the inflation and uncertainty brought on by the COVID-19 epidemic at the moment. Since older adults are more susceptible to health problems, it is particularly necessary to safeguard them. Consequently, investing in the best pension scheme will aid in providing for many areas of retired older adults’ life. These pension schemes will assist them in paying for their medical bills and other expenses without placing an unnecessary financial strain on their family, friends, or even themselves.