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Make sure you retire with a pension | How to choose the best retirement plan?

February 7, 2022

You have a certain lifestyle that you are accustomed to, and it is reasonably easy to understand that you would want the same lifestyle moving forward, if not a better one. While you work hard to build a stable life for yourself and your loved ones, you also have a responsibility to secure your own future. In order to do so, it is essential to have a proper retirement plan in place.

When planning your retirement, here are answers to some questions you should be asking.

What exactly is a Retirement Plan?
A retirement plan gives you the opportunity to relish your retirement by giving you a regular income, which can help you sustain your finances. While it may seem that retirement is a long way off, it is not. Retirement comes sooner than you think and that is why it is important to figure out what you need from your retirement plan. Moreover, having a retirement plan also ensures that you are prepared for an emergency, however far-fetched that might be.
Planning for retirement now means ensuring that you make systematic savings over time, which, in turn, gives you returns when you need a steady source of income the most. While retirement means that you are void of your usual income from your employer/client, your sustenance costs do not go down. This includes your usual cost of living, medical expenses, and any others associated with your lifestyle.
While every retirement plan is unique with their own attributes, the National Pension System is a retirement plan that supersedes most other retirement plans by a large margin.

Why do you need a retirement plan?
You can be the master of your trade, and can possess a great deal of knowledge, but what we can never be certain of, is what the future holds for us. While we hope that it is certainly bright and the best, it does not hurt to take precautions and ensure safety in case of uncertainties. Saving now, to ensure that you do not have to struggle in the future, is one of the biggest precautions we can take while we’re still gainfully employed.
Moreover, retirement plans like the National Pension System, an initiative by the Government of India, ensures that you save a significant amount of money every year in taxes. You can save as much as ₹62,400 every year over and above the tax redemptions you can get on other investments.
This retirement plan not only ensures that you have an adequate amount of income every month after retirement as a pension, but also saves you money right now with its tax benefits, which make it a prospect that is hard to pass by.

What makes NPS a special retirement plan?
The National Pension System, or the NPS, is a government initiative that was introduced in 2004 and is regulated by the Pension Fund Regulatory and Development Authority (PFRDA), and has appointed KFintech as Central Recordkeeping Agency (CRA).
What makes NPS special is its ability to increase in value over time. The funds invested into the National Pension System are pooled together and then reinvested into the market as government bonds, bills, corporate debentures, and shares, making it a highly diversified portfolio. These funds are invested by portfolio managers who have been vetted by the PFRDA. These investments increase in value over time and accumulate to form a substantial corpus that you can withdraw on retirement as lump sum, and in the form of monthly payouts as pension.
The National Pension System is among the most flexible retirement plans because it gives you the liberty to have the investment schemes and the fund managers of your choice. Depending on the returns you expect from your investment, you can make the necessary choices. Moreover, you can also switch between schemes and fund managers, keeping in accordance with certain regulations.
The National Pension System also provides you with substantial tax benefits. You can save upto ₹1,50,000 under section 80CCD, plus an additional amount of upto ₹50,000 under section 80CCD (1B). This attribute of NPS makes it a retirement plan with dual benefits, of both saving your money as well as ensuring that you have a superior return on your investments.
This scheme is open to all Indian citizens between the ages of 18 and 75. If you are looking for a retirement plan, you check the National Pension System with KFintech here <>