Retirement plans offer financial independence to working individuals post-retirement. You should invest in the best retirement plan in India to avail maximum possible benefits for a stress-free retirement life. It is never too early to invest in pension plans. Anybody who earns should give retirement planning a thought.
It is terrifying to imagine a life where you have to depend on somebody else for your needs, especially if you have provided for yourself for your entire life. Investing in the best retirement plan in India will ensure a steady flow of income even after retiring. However, it is essential to know facts about the best retirement plan in India before investing.
Facts About Best Retirement Plan in India
Are you looking to buy the retirement plan of your dreams? If yes, then here are some facts you should know before investing in one:
1. There are Two Phases of Retirement Plans in India:
The best retirement plan in India is divided into two phases: the accumulation phase and the vesting phase. In the accumulation phase, the investor has to pay premiums annually until retirement. In the vesting phase, the investor, upon retiring, receives pension money from their pension corpus as an annuity. This annuity is offered to the investor until death.
2. You Cannot Withdraw the Full Amount:
If you are thinking of withdrawing the full accumulated funds upon retiring, it would be disappointing news that you cannot do so. But, unfortunately, you are allowed to withdraw only one-third of the funds, the remaining of which shall be given to you in the form of an annuity.
3. Tax is Deductible on Annuity:
Under Section 80C, investments made in the best retirement plan in India are tax-deductible up to a total of Rs. 1 lakh. In other words, only one-third of the investment made in retirement funds is exempted from tax. However, the retirement pay-outs received by the person in the form of an annuity are not exempted from tax.
4. You Get Assured Returns on Retirement Plan:
Investing in the best retirement plan in India is worthwhile since it offers assured returns on your investment amount. Of course, these retirement plans offer no substantial return margin, but you would most definitely secure a beneficial monetary fund for your future.
5. You can Choose as per your Needs: There are assorted options present in the market for you to choose from. The best retirement plan in India would cater to your needs. Unit-linked insurance plans are, however, a very good investment opportunity as they help invest in both equity and debt. In comparison, the retirement plan offered by insurance companies focuses on investment in debt. Therefore, it’s essential to choose as per your requirements.
The best retirement plans in India are also offered by the Government of India and insurance companies. These retirement plans focus more on a balanced approach to mutual funds. It follows a 40:60 proportion in equity and debt investment, respectively. Another option available in the market is the National Pension Scheme. It is a greatly preferred retirement plan because of the benefits it has to offer. With investment in NPS, the investor can choose their investment in debts, equities or government securities. Finally, PPF is another option you can go for. It is not exactly a retirement plan, but most individuals in India use it to fulfil their retirement expenses. Like other schemes, PPF gives you returns according to the fixed interest rate. You can calculate this amount using a PPF calculator.
You can avoid the hassle of calculating the premium rates of your retirement plan and the maturity value of your plan by using a PPF interest calculator. It also helps you calculate the tax exemptions on your retirement plan.
Using an online PPF interest calculator is simple.
Step 1: Look up a PPF interest calculator.
Step 2: Choose the annual investment amount and adjust the tenure.
Step 3: The maturity value of your principal investment will be displayed on your screen.
If you have made it this far, you should be aware of some of the most vital facts about retirement plans offered to the citizens in our country by now. Therefore, you can choose a plan that best fits your needs. Now that you know the best retirement plans in India and a PPF interest calculator, we wish you the best for your retirement.