Why These Pension Schemes in India Are the Best for You?

You can never anticipate what lies ahead of you. The unpredictability of life with the recent development of COVID-19 has forced us to think about protecting ourselves and our loved ones. The present time has made it crucial to plan for a secure future. Indeed, you can’t escape unforeseen situations, but you can always be prepared for them.

It is essential to be financially independent in today’s day and time, even more, when you are living your retirement life. This is because a person has limited sources of income after retirement. Here’s a list of pension schemes in India that are the best for your retirement planning.

Unit Linked Insurance Plans (ULIP):

ULIP orUnit Linked Insurance Plans are preferred pension schemes in India due to the dual benefit that comes with them. Unit Linked Insurance Plans offer not only insurance opportunities but also investment opportunities. ULIP provides a death benefit, the sum that will be sent to the nominee if the policyholder passes, given unfortunate circumstances while the ULIP is still in effect. In addition, unit-linked insurance plans come with tax benefits.

Indira Gandhi National Old Age Pension Scheme (IGNOAPS):

This pension scheme in India is also known as the National Social Assistance Program and was launched by India’s Ministry of Rural Development in 2007. This pension scheme’s primary focus is to provide senior citizens with social security through a promised income. The subscribers of the scheme are disabled people, widows, and senior citizens. The applicants should belong to low-income groups or BPL and must be 60 years or older to subscribe to this scheme.

Atal Pension Yojana (APY):

Atal Pension Yojana (APY) is quite suitable for people from the lower income class. This pension scheme in India, like the rest, offers lower working-class citizens an opportunity to plan their life post-retirement life. The policyholdermust make contributions every month for at least 20 years. After that, either a fifty percent contribution is made by the Central Government for each contribution to the pension fund, or a thousand rupees is contributed annually for at least five years.

National Pension Scheme (NPS):

The National Pension Scheme is one of India’s top pension schemes. The investor can receive a 9%–12% interest rate from NPS. In addition, the NPS allows investors to make premature withdrawals of up to 25% of their savings three times over the course of five years.

Varishtha Pension Bima Yojana(VPBY):

VPBY offers the subscriber Immediate annuity plans, which are annuity pay-outs. The fact that this plan has no upper age cap is just one of its many benefits. The beneficiary of this arrangement may select a monthly, quarterly, half-yearly, or annual pension. It offers a guaranteed pension with an 8% yearly return over a 10-year period. The premiums paid for this policy are not subject to tax. The fund value is paid to the nominee if the policyholder passes away.

Public Provident Fund (PPF): Public Provident Fund is not officially a pension plan. However, most individuals use it as their retirement fund. It is long-term savings and investment scheme that offers returns, investment safety and tax benefits. PPF offers you an interest rate fixed by the governing body, like other investment and savings schemes. You can use a PPF interest calculator to estimate the amount you will get at maturity. A PPF interest calculator will make calculating premiums a child’s play.

The calculator works on a mathematical formula, but by using a PPF interest calculator, you don’t have to break a sweat. Instead, ease back and relax while it does the tiresome work.

The formula to calculate PPF is: F = P[({(1+i)^n}-1)/i]

Here the variables represent –

F = Maturity of PPF

P = Annual Investments

I = Rate of Interest

N = Total Number of Years

For instance- Suppose Rajesh makes annual payments of Rs.50,000 towards his PPF investment for 15 years at 7.1%; his maturity proceeds at the end of 15 years would be Rs. 13,56,07, with interest earning of 6,06,070.

To use an online PPF interest calculator, follow these steps:

Step 1: Look up a PPF interest calculator on Google and go to your preferred website.

Step 2: Choose the annual investment amount and, if desired, the tenure.

Step 3: Your screen will show the maturity value of your initial investment.

Final Thoughts:

To choose among the pension schemes in India, use a PPF interest calculator to make the most of your chosen pension scheme.