Numerous retirement plans are already available for your perusal. You may compare all of these options to zero in on the best retirement plan in India that is suited for your specific requirements. Choosing the plan that works for you is the ultimate focus here, and a thorough comparison is necessary as a result.
The Best Retirement Plan in India for Your Needs
While selecting the best retirement plan in India, let us look at a few choices below.
- Retirement Plans-
One of the best options is to opt for retirement plans offered by insurance companies in India. These have the following key features:
- Life insurance coverage is offered for the duration of the policy.
- If you opt for deferred annuities, you can build a large amount by the end of the policy duration.
- Upon completion, you may withdraw approximately 60% of your retirement fund. The remaining 40% may be kept as your pension corpus and used to purchase an annuity.
- You will receive this pension each month for a fixed tenure or your entire lifetime, based on what works for you.
- You can also expect tax benefits from these policies.
- NPS (National Pension Scheme)-
NPS is a plan that is backed by the Government. Some of its main features include:
- PFRDA, or the Pension Fund Regulatory and Development Authority manages this scheme.
- Those who are between the ages of 18 and 70 may deploy investments in the plan. You may start initially with Rs. 500 and then Rs. 1,000 every year until you turn 60. There is no maximum investment limit.
- Your contributions will be invested in various schemes, including PSU pension funds, Government bonds, and other instruments.
- When you turn 60, you may withdraw 60% of the contributions and interest in Tier I accounts as a lump sum. The remaining 40% will be used to offer an annuity.
- Your payments are eligible for tax deductions while there are additional deductions on Tier I account contributions.
- ULIPs-
These policies are also helpful in terms of building a sizable retirement corpus. Here are some of their key aspects:
- Life coverage for the whole duration of the policy.
- You can choose your allocation for investments across various funds.
- You can get market-linked investment returns while choosing funds based on your risk appetite. Funds can also be flexibly switched during the tenure of the plan to minimise your risks and maximise your returns.
- ULIP premiums are eligible for tax deductions. But after the 2021 budget, ULIPs with premiums exceeding Rs. 2.5 lakhs per annum are subject to capital gains tax, similar to equity mutual funds.
- They have lock-in periods of 5 years.
- You can build a sufficient corpus for the future and then invest it to purchase an annuity.
Compare these options carefully and then make an informed decision based on what best suits your needs.
Also Read: 15 Best Tax Saving Investments Tips
