Flexible Investment Options: Find the Right Pension Scheme for You: Retirement years are considered to be the golden period because you’re finally resting without any tension for tomorrow’s work.

You can be worry-free and go where you wish to travel and spend time with your family. However, considering financial planning in your early years is necessary to live these dreams.

A suitable option in this case is to find the right pension scheme. Let’s find out about the
available options and choose the one that aligns best with your future needs. Let’s learn everything that you need to know about before buying a pension scheme.

What are Pension Schemes?

These are simple investment plans in which a portion of your income is used by your insurance company to buy funds. Consider this income your salary after retirement, which will help you meet your daily or monthly expenses.

These schemes have two stages: the accumulation stage and the vesting stage. The first one refers to the stage where you keep on paying a certain amount until retirement. The latter means the stage where you get the money according to the terms and conditions of the scheme you have invested in.

Understanding Different Pension Schemes

There are various pension schemes to be considered while making the final decision. However, NPS is one of the top ones among them. NPS, like other pension plans, is a retirement plan where you keep on investing a certain amount till the time you retire. And you receive the returns when you retire.

Earlier, this scheme was only for government employees. But after 2009 it was made available to all the citizens.

Types of National Pension Scheme Accounts and Funds

Now, it’s time to discuss the types of NSP accounts. Basically, they come in
two forms:

● Tier I: This is a default account that gets opened in NPS. There’s a set lock-in period. This
means withdrawal is not allowed in this account. Your minimum contribution should be
Rs 1000 without any maximum limit. And, there’s upto two lakhs of tax exemption.

● Tier II: This type of account is typically a voluntary add-on to your existing Tier I account.

There’s no lock-in period, meaning withdrawals are allowed. Your minimum contribution has to be Rs 250 without any maximum limit. And, only government employees get to have a tax exemption of Rs 1.5 lakh.

Now, let’s discuss four types of NPS funds.

1. Equity is a high-risk, high-return fund and may not perform well as a short-term investment but yields highly profitable returns in the long term.
2. Government securities are a safe and least volatile type of NPS funds, it can be a great pension scheme. 100% is invested in the government securities.
3. Corporate debt is a medium-risk, medium-return bond fund that invests in corporate debentures. The returns are generally higher in comparison to the government securities.
4. Alternative Investment Funds are a unique investment scheme to consider as your pension fund. The money is invested in areas like real estate, private equity, infrastructure, etc.

Benefits of Investing in National Pension Schemes

When you opt for the national pension plan, it can bring you a range of benefits. Some of them are as follows:
1. It is a simple to invest-in and accessible scheme.
2. The pension scheme in India is now available online, so you have the convenience of
investing in your comfort.
3. The invested amount is managed by the entity from where you get your plan.
4. NPS provides flexibility in choosing to pay whenever you want, i.e., monthly or a lump
sum amount at once.
5. The returns of this fund are higher than traditional investment plans like FD or PPF.

6. Being regulated by PFRDA, this pension scheme offers transparency and reliability.
7. It’s one of the best long-term growth schemes that helps you secure your future.

Securing Golden Years!

If you are looking for a sustainable investment option to secure your golden, a pension scheme might be the best answer. While securing returns, you get to cement a financially sound future to enjoy. Investing in such plans can become easier with insurance-providing companies like Canara HSBC Life Insurance. Their flexible investment options and easy to use calculators can help you avail some of the best options.

Visit their official website for detailed information on the topic today!