Why is NPS the best investment plan for senior citizens? Find out!

Retirement planning is becoming increasingly popular among Indian citizens. A reliable pension plan ensures that senior citizens receive steady income deposits in their accounts to cover daily expenses. In this context, the National Pension System (NPS) is regarded as one of the best investment options for senior citizens. This plan offers subscribers a pension scheme that helps maintain financial stability during their golden years.

Introduced by the Government of India, the NPS aims to provide a financial cushion for retirees post-retirement. In this blog, we will explain how the NPS serves as the best investment plan for senior citizens and why it should be chosen.

How does the NPS facilitate a comfortable retirement? Let’s explore.

The NPS is considered one of the top investment plans for senior citizens because it guarantees both stability and growth. Retirees benefit from market-linked returns while ensuring a dependable monthly pension. Upon reaching the age of 60, you can withdraw up to 60% as a lump sum, while the remaining 40% must be used to purchase annuities for a regular pension after retirement. 

Here are 7 reasons why the NPS stands out as the best investment plan for senior citizens:

1. Regulated: The NPS is overseen by the Pension Fund Regulatory and Development Authority (PFRDA), ensuring that your investments remain safe.
2. Accessible to everyone: This affordable investment plan allows you to start investing with as little as ₹500.
3. Tax Benefits: The NPS provides tax benefits up to ₹1.5 lakh under Section 80(C) and ₹50,000 under Section 80CCD (1B), which is in addition to Section 80(C).
4. Diversification: Unlike traditional investment options, the NPS helps you diversify your portfolio across equity, corporate bonds, government securities, and alternative investment funds (AIFs).
5. Better than traditional retirement plans: Being equity-linked, investment in NPS have a higher return potential compared to fixed deposits (FDs) and Public Provident Funds (PPFs), which is a significant reason for its preference among senior citizens.
6. Flexible: The NPS provides subscribers with the option to choose their investment strategy. They can select between auto and active modes and choose fund managers based on their investment goals and time horizons.
7. Portable: This is a key feature of the National Pension System, allowing subscribers to maintain their contributions regardless of changes in location or job, ensuring unaffected returns.

Click here to learn how NPS is an attractive retirement plan for every citizen of India.  

Final Thoughts

The National Pension System is a prominent retirement plan for both senior citizens and younger individuals. As mentioned above, any citizen of India between the ages of 18 and 70 can invest in it, making the NPS an attractive retirement saving option. If you are seeking the best saving scheme for senior citizens, the NPS is a structured and government-backed plan that ensures long-term financial security. However, it is advisable to consult a financial advisor before starting your journey.