Retirement might seem really far away, but if you begin proper planning and investment now, you can ensure that you have a comfortable and luxurious life post retirement. While most people in their 20s or early 30s are not thinking of long term plans and goals, investing from that age ensures bigger returns post retirement.
One such effective retirement and tax planning tool is the NPS Pension Plan. The NPS Pension plan is a voluntary, defined contribution retirement savings scheme, available to all persons between the age of 18 and 60. With an aim to provide adequate finance to every customer, one can systematically invest in the National Pension System in India, during their working life.
The National Pension System in India has been introduced by the Government of India promoted, PFRDA (Pension Fund Regulatory and Development Authority). Any and all investments by individuals are pooled in a pension fund. These funds are then invested by PFRDA regulated professional fund managers as per the approved investment guidelines in the diversified portfolios comprising of government bonds, bills, corporate debentures and shares.
In accordance to the returns generated on these investments, the individual contributions would grow and accumulate every passing year. In order to ensure that this scheme reaches a large number of people, PFRDA has appointed POPs (Points of Presence) whose duty is to act as an effective link between you and NPS.
Benefits of NPS:
You get to decide how much money you want to periodically set aside for your retirement and securing your financial future, provided that the minimum amount per contribution is at least Rs. 500, minimum contribution per year is at least Rs. 6000 and there is at least 1 contribution made per year.
You are able to choose an investment plan and pension fund manager according to your needs.
You can operate it from anywhere in India, even if you change your city, job, pension fund manager and investment asset classes.
NPS is regulated by the Government of India promoted PFRDA, which has transparent investment norms and regularly monitors and reviews the performance of pension fund managers.
5) Tax Benefits:
If any customer contributes voluntarily towards the NPS scheme, then he would get an additional benefit of Rs. 50,000 under section 80CCD (1B) which would be over and above the ceiling limit of Rs. 1,50,000 as prescribed under section 80 CCE.
Once you exit NPS, you may use the accumulated pension wealth under the scheme either to purchase a life annuity from a PFRDA empanelled life insurance company or withdraw a part of the accumulated pension wealth as lump-sum amount.
So, what are you waiting for? Invest in NPS today and have an enjoyable life post-retirement.