It should also be highlighted that, with the launch of its Saral Pension Scheme by Life Insurance Corporation of India, there is a tremendous need for an effective retirement product in the country.
New Delhi: According to the 2011 Population Census, there are 10.3 crores, senior persons, in India, accounting for 8.6% of the total population. This figure is expected to grow at a pace of 3% each year, bringing the total number of elderly persons to 32 crores in the next three decades. As a result, their requirements will grow. With the launch of the Life Insurance Corporation of India’s Saral Pension Scheme, special emphasis should be paid to the fact that the country has a significant need for an effective retirement product.
Here are five essential pension plans to consider:
Saral Pension Scheme of LIC
It’s a single premium, non-linked, non-participating individual instant annuity plan. This plan is for those between the ages of 40 and 80. There is no maximum investment limit for this, and the minimum investment limit is Rs 12000. Contributions can be made monthly, quarterly, half-yearly, or yearly. For investors, there are two options: a Life Annuity, which pays out 100% of the purchase price upon the death of the individual, and a Joint Life Last Survivor Annuity, which pays out 100% of the purchase price upon the death of the last survivor.
NPS (National Pension Scheme)
The National Pension System (NPS) is the most popular and tax-friendly retirement plan available to seniors. There is also the option of withdrawing funds after three years of investing. Before the maturity date, only 25% of the total deposits can be withdrawn. During house construction and other situations, you can make a tax-free withdrawal.
APY (Atal Pension Yojana)
This unique pension and retirement system is open to all Indian nationals between the ages of 18 and 40. After reaching the age of 60, a person will be able to withdraw his entire pension fund. The government also contributes to the premium in order to bring the weaker and lower-income members of society into the pension system. Only individuals who do not have access to any other form of security are eligible for government aid. The government contributes 50% of the subscriber’s contribution or Rs 1000 per year, whichever is smaller, under this scheme. This government contribution will only be granted to persons who are not covered by any other social security plan and do not pay income taxes.
PMVVY (Pradhan Mantri Vaya Vandana Yojana)
PMVVY provides a fixed monthly pension rate of 7.4 percent for a period of ten years, making it an appealing scheme for senior individuals seeking a steady income with guaranteed benefits. There is also the option of taking a loan equal to 75 percent of the deposit after three years. If a loan is not repaid, the principal amount will be reclaimed. However, it is worth noting that this strategy does not provide any tax benefits.
SCSS (Senior Citizen Savings Scheme)
Inflation-protected returns of 7.4 percent per year are provided by the plan. SCSS allows you to begin with a minimum investment of Rs 1000 and a five-year investment term. You can then extend it for another three years. This programme is open to all citizens over the age of 60. The maximum investment in this programme per financial year is Rs 1.5 lakh, and the interest earned is tax-free under section 80C of the Income Tax Act.