Best Retirement Pension Plans: Most of the people are worried about tomorrow. To ensure that there is no problem in the coming tomorrow, they make all plans and make investments or other preparations. And it is also necessary. Because on retirement, where our income decreases, the body also starts leaving with it. That is why it is necessary that in youth itself, prepare to live old age.
The most needed in retirement planning is a substantial amount. According to the rising inflation rate, we need a large retirement fund for life after 30-35 years. That is why it is important that you should start saving for retirement in the early days of the job. Today, there are many schemes of government and private sector for retirement planning in the market.
Public Provident Fund (PPF) and National Pension Scheme (NPS) are the most popular retirement plans in India. Now the question comes that which plan is best between PPF and NPS, which plan gives more returns and which plan can fulfill our needs of tomorrow.
Tax and insurance experts agree that by the way, both NPS and PPF plans are better. You can choose both or any of these plans as per your requirement.
National Pension Scheme
In National Pension Scheme ie NPS, you invest in equity. Certainly investing in equities gives higher returns than PPF. A large lump sum fund is available on retirement by investing in NPS. Also, pension is available on the basis of your annuity amount and its performance.
You can contribute regularly to NPS. He can also withdraw a part of the accumulated money in this fund at one go and use the remaining amount for regular pension after retirement.
two types of accounts
There are two types of accounts under NPS, Tier-1 and Tier-2. The amount deposited in Tier-1 account cannot be withdrawn before the age of 60 years. Whereas, Tier-2 account holders can withdraw the money deposited in it whenever they want.
Investments up to Rs 1.5 lakh in NPS get the benefit of tax exemption under Section 80C of Income Tax and you can also claim a separate deduction of Rs 50,000 under 80CCD (1B).
On the maturity of the NPS account, the investor has to put at least 40 percent of the amount in the annuity. From this amount you get pension. Annuity is a contract between you and the insurance company. Under this, it is necessary to buy an annuity of at least 40 percent of the amount in NPS. The higher the amount, the higher will be the pension amount.
Public Provident Fund
Public Provident Fund (PPF) is a long term savings scheme. Returns can be obtained on it by depositing a small amount in it. The tenure of PPF is 15 years. It can be extended for another five years. The central government determines the interest on the PPF account. The current interest rate is 7.1 percent.
Public Provident Fund also gets the benefit of tax exemption under section 80C of the Income Tax Act. In this scheme, tax exemption can be claimed on an amount of Rs 1.5 lakh. Tax exemption is available on both the interest earned on PPF and the maturity amount.