#Financial-Planning  #Retirement  #NPS  #Finance 

Retirement Planning

  • Retiremant planning should be done as early as possible
    • NPS

National Pension Scheme(NPS)

  • A social security initiative by the Central Government

  • Open to employees from the public, private and even the unorganised sectors except those from the armed forces

  • 2004 –> Open for govt employee

  • 2009 –> Open for Everyone

  • Regulated by –> Pension Fund Regulatory and Development Authority (PFRDA)

  • NPS Detail

  • NPS asset-class allocation

  • NPS Calculator

  • Quick Overview

    • Lockin-period: Till age 60 yrs
    • Age limit: 18 - 65
    • Account
      • Can open Tier-I and Tire-II account
      • But it’s better to have only Tire-I
    • Minimum NPS contribution
      • Rs 1000/year
    • It invest in 4 asset-classes
      • Equity (max 75%)
      • Govt bonds
      • Corporate bonds
      • Alt investment (max 5%)

  • Account Opening

    • Best way to Open NPS account
      • Paytm Money or ETMoney
      • A unique Permanent Retirement Account Number or PRAN is generated
    • Re-invest or track investment using the above app

  • Other Apps

    • NPS - KFintech CRA
    • NPS by NSDL
    • Track and re-invest using this app at low cost

  • NPS asset-class investmet plan

    • Active choice
      • You can choose your own exposute percentage(%) to the above asset class
    • Auto choice
      • It is available as a default option for subscribers as per the system

  • Pension fund management companies

    1. SBI Pension Funds Private Limited
    2. UTI Retirement Solutions Limited
    3. LIC Pension Fund Limited
    4. Kotak Mahindra Pension Fund Limited
    5. HDFC Pension Management Company Limited
    6. ICICI Prudential Pension Funds Management Limited
    7. Birla Sun Life Pension Fund Manager

  • NPS Withdrawal on Maturity

    • After maturity only 60% can be withdrawn
    • For remaining 40%, one has to purchase an annuity mandatorily.

Returns

  • Investment– Interest – Lock-in period – Risk Profile

  • NPS – 8% to 10% – Till retirement – Market-related risks

  • ELSS – 10% to 12% – 3 years – Market-related risks

  • PPF – 7.1% – 15 years – Risk-free

  • FD – 4% to 6% – 5 years – Risk-free

  • ELSS is better than NPS

  • And NPS is better than PPF

Features & Benefits of NPS

  • Tax saving benifits

    • Section 80CCD

  • Better Returns/Interest

    • 10% - 12%