Make hay while the sun shines – Plan your retirement with NPS

Have you heard the story of ‘The Ant and The Grasshopper’? The grasshopper keeps singing the songs in the summer while the ants plan and store enough food for the winter. When the winter season arrives, the grasshopper finds itself with no food, and cannot go out in harsh winter conditions. On the other hand, the ant is fully prepared and does not need to worry about food.

So, how should you plan for your retirement, like the grasshopper or the ant? If you choose the second option, then the National Pension System can be the best retirement plan. If you invest today, then you can create a corpus for your retirement and enjoy a stress-free retirement life.

In this blog, we will explore how NPS is one of the best retirement plans for you.

Why should you choose the National Pension System?

The National Pension System (also known as the National Pension Scheme), is available to all individuals who are working in the public, private, and even unorganized sectors. NPS is not available for professionals who are working in the armed forces.

In the National Pension System retirement plan, you have to make a minimum contribution of ₹1,000 in a financial year, or you can also make small contributions as low as ₹500 per month annually.

So, how can NPS help you generate income after your retirement? Let’s have a look.

1. Better performance than traditional investments – The NPS scheme invests in market-linked equities that offer better gains as compared to traditional pension plans like PPF.
2. NPS comes with tax benefits – The NPS Scheme offers tax benefits under Section 80CCE of the Income Tax Act. Up to a 1.5 lakh contribution is eligible for tax exemption. Other than this, you can save up to ₹50,000 u/s 80CCD(1B) by making voluntary contributions to NPS. This section is exclusive to NPS.
3. Partial withdrawal – You can invest in NPS until 70 years of age; however, with certain conditions, partial withdrawals are allowed after 3 years from the date of opening an NPS account.
4. Voluntary investment and retirement plan – NPS is a voluntary investment and retirement plan. You can choose the amount as well as the date during a financial year.
5. Regulated by PFRDA – NPS is regulated by the PFRDA (Pension Fund Regulatory and Development Authority) of India. This is another feature of NPS that makes it one of the best retirement plans for individuals.
6. Easy to open an NPS account – If you are looking to open an NPS account to plan your retirement, you can simply visit here.

So, these are the few benefits of the NPS scheme. Retirement planning is not an easy task, but at the same time, it is not so tangled up. When you plan properly and have a clear goal in mind, you can live a stress-free retirement life.

Conclusion

The moral of ‘The Ant and The Grasshopper’ story is that we need to plan for the future today instead of suffering later. And the NPS retirement plan gives you this option. In short, plan for your future today and reap the benefits tomorrow.