What are the top pension plans for seniors backed by the government of India?

Retirement planning is a safe and secure way to plan for your future and protect you from inflation in the future. There are multiple pension plans in India, but schemes like Pradhan Mantri Vaya Vandana Yojana, the ATAL Pension Scheme, the National Pension Scheme, and the Senior Citizen Savings Scheme (SCSS) are some of the best to keep in mind while planning for your retirement.

government pension plans

Best government pension plans!

Retirement planning is an important part of financial planning as it helps you build a corpus of funds for your retirement. Retirement planning also helps you diversify your investments and ensure that you have the right mix of assets to meet your financial goals.

Also read: Retirement planning tips!

  1. National Pension Scheme (NPS): The National Pension Scheme (NPS) is a government-sponsored and regulated pension scheme in India. It was launched in January 2004 and is managed by the Pension Fund Regulatory and Development Authority (PFRDA). The scheme is open to all citizens of India, including NRIs and OCIs. The NPS is a voluntary, defined contribution retirement savings scheme designed to enable individuals to accumulate savings during their working life. Contributions made to NPS are eligible for tax benefits under Section 80C of the Income Tax Act, 1961. The NPS allows subscribers to choose their preferred asset class and investment option. NPS also offers an additional tax benefit of up to Rs.50,000 under Section 80CCD(1B). The returns from NPS are market-linked and may vary depending on the performance of the underlying investments.
  2. Atal pension yojana: Atal Pension Yojana (APY) is a government-backed pension plan that primarily targeted at the unorganized sector of India. It was launched on 9th may 2015, by the Prime Minister of India, Narendra Modi. The scheme is administered by the Pension Fund Regulatory and Development Authority (PFRDA). The program is available to all Indian residents in between ages of 18 and 40, however in order to qualify for such government's co-contribution, participants must not be covered under any other legislative social welfare and pension programs (such as employee provident funds). Those who subscribe to the scheme will receive a fixed pension after retirement, ranging from Rs.1000 to Rs.5000 per month, depending on their contribution. The benefit of the scheme is available to the spouse of the subscriber, and the pension amount is payable on the death of the subscriber to the spouse.
  3. Pradhan Mantri Vaya Vandana Yojana: For all of those 60 and older, the Pradhan Mantri Vaya Vandana Yojana (PMVVY) pension program was launched by the Indian government on May 4, 2017. The Life Insurance Corp. of India gives the plan, which offers a pension based on a set return rate. From 4 May 2017 through 3 May 2020, memberships to the plan are permitted. The plan offers an 8% annual interest rate that is paid out monthly for ten years. During the policy's 10-year duration, the pension value will be paid out upon the conclusion of each predetermined period according with the regularity selected mostly by user at the date of acquisition. A least of Rs.1,50,000 can be used to acquire a pension, and amounts can increase in variations of Rs.10,000 upto a maximum of Rs.7,50,000. The program includes a financial assistance with a maximum lending amount of 75% of the original cost.
  4. senior citizen saving scheme (SCSS): The Senior Citizens Savings Scheme (SCSS) is a savings scheme launched by the Government of India in 2004 to provide senior citizens with a safe and secure investment option. This scheme pays an annual interest rate of 8.6% and is backed by the Government of India up to Rs15 lakh. The minimum amount that can be invested in this scheme is Rs1,000, and the maximum is Rs15 lakh. The tenure of the scheme is five years, and it can be extended for another three years. The interest earned from the scheme is fully taxable.

Also read: Ways to save!

Final words 

There are numerous pension plans available to those planning their retirement, but these government-sponsored plans are the best to enroll in order to reap the benefits and have a safe and secure future. 


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