Have you ever noticed the fascinating world of ants, where strategic planning and survival instincts reign supreme? As the summer sun graces the land, these diligent creatures gather their precious sustenance, ensuring a bountiful supply for the unforgiving winter months. By wisely stockpiling their provisions, they cleverly avoid the perils of the harsh climate, safeguarding their lives and securing their future. Are you wondering now how you would secure your future after retirement? Let’s explore it.

The NPS, or National Pension System, also known as the National Pension Scheme, is a voluntary retirement plan designed to empower you in creating a retirement corpus. This is not all; there are numerous NPS tax benefits.

Let’s have a look at NPS tax benefits

NPS Tax treatment at maturity

Although NPS benefits can reduce taxes during the accumulation phase, it’s critical to comprehend how taxes are handled when an NPS matures:

Lumpsum withdrawal: 60% of your NPS corpus is tax-free when you choose to withdraw it at maturity. At the time of purchase, the remaining 40% of the annuity is also tax-exempt, but the pension you receive from it is subject to tax based on your applicable tax bracket.

Annuity payout: Your periodic annuity pension is regarded as part of your income and is taxed accordingly. The tax impact may be manageable, though, because this income is typically received in retirement, when your overall income may be lower.

Conclusion

Anyone who wants to start planning for retirement early and has a low tolerance for risk should consider the NPS. It goes without saying that having a steady pension (income) in your golden years will be a blessing, especially for those who leave private-sector employment. As an NPS subscriber, you can avail yourself of many tax benefits while investing. All you need to do is plan your retirement and set financial goals. NPS tax deductions can help you in your second innings towards a financially secure future

Have you experienced an electrifying moment when a renowned celebrity comes on the stage and the audience erupts in a symphony of cheers and applause? People wait and line up in queues to catch a glimpse of their favourite star. The star has reached a certain level of popularity with their brilliance and performance over the years. 

The scenario of NPS investment is not a different tale. According to statista.com, the National Pension System had approximately 14 million subscribers in the financial year 2021 across India, and these are not small numbers. Still, most people are looking for NPS investment horizons to financially secure their retirement.

Why are people inclining towards NPS investment?

Scenarios have been changing, and many millennials are becoming more inclined towards retirement planning. They start looking for options to enjoy their lives after they stop working. But there are many financial influencers on the internet, and millennials can make hasty decisions without consulting any financial advisor or professional.

Retirement planning can be an uphill task if you are not sure about your goals or how to secure your future after retirement. Having stated that, a low-cost retirement solution like NPS investment offers a systematic and easy approach, which makes retirement planning easy.

What should you consider before choosing an NPS investment?

Firstly, as a subscriber to NPS investment, you need to treat it like a systematic investment plan. Wondering why? It has a low expense ratio, which will significantly help in increasing long-term performance.

Secondly, you can boost the NPS return rate, as you have the advantage of changing your asset allocation twice a year.

Thirdly, to increase and balance the return rate, you can invest up to 75% in equity.

Major Benefits Associated with NPS Investment

Here is a comprehensive listing of all the significant benefits associated with the NPS:

• Manage your NPS account smoothly with the allotted PRAN
• NPS investment is one of the affordable plans that are available to the masses
• You can get tax benefits while investing in the National Pension System
• You can have the choice to open many NPS accounts
• You’ll have the advantage of changing your fund manager with NPS

Conclusion

People are increasingly leaning towards NPS investment. It is evident that the changing scenarios have led to an increased inclination among millennials towards retirement planning. The fluctuations in the market will keep happening, but you don’t need to bother about that; you just need to remember the benefits of NPS and invest for a worry-free life after retirement. But it is also important to exercise caution when making financial decisions as there are numerous influencers who may not provide comprehensive advice. Consulting a financial advisor can help ensure informed and well-thought-out choices. 

“The biggest part of our digital transformation is changing the way we think.” 

Simeon Preston

You used to hear a phrase, ‘The world is shrinking’, which is metaphorically true, thanks to digitalization. Everything is at our fingertips; you just need to tap, and it is done. In today’s fast-paced world, one thing that is done regularly is planning. People start planning their future; they care more about their savings, investments, and expenses. They look for different options in funds and investment programs to grow their wealth, and even youngsters start planning for their retirement, which is eventually a good thing.

So, how would you perceive this fact? Do you also like to plan and create a corpus for your retirement? If the answer is ‘yes’, then this blog is for you!

You must have heard or read about the National Pension System online. But you don’t know where to start or how to apply for it. Let’s understand the procedure.

How to apply for a National Pension System account online

While applying for an NPS account online, or eNPS, there is a similar pattern. Either you visit NPS to register online and link your mobile number, Aadhaar, and Permanent Account Number (PAN) with your NPS account.

Secondly, you can also visit KFin Technologies website to enroll for an NPS online account. Let’s understand this one by one:

Step 1: Visit https://www.nps.kfintech.com/

Step 2: Click on ‘Join NPS’.

Step 3: You will be redirected to a new page.

Step 5: Enter the following details:

• Your full name
• Your date of birth
• Mobile number
• Your PAN number
• Email ID
• Application type
• Resident type
• Accept the terms and conditions
• Click on ‘Create an account, and you will be redirected to the NPS page

NPS comes with many benefits; let’s have a look at its features briefly.

Features

• 40% of the NPS corpus is tax-free at maturity, while the remaining 60% is taxed
• An annuity purchase is made with tax-free money
• If you take out 40% of your corpus and put the other 60% into an annuity, there won’t be any taxes due on the remaining 20%
• At least 40% of the corpus must be used to purchase an annuity
• Withdrawals made in one lump sum are taxed
• Section 80(C) of the Income Tax Act has increased the annual total tax exemption for NPS from ₹1.5 lakh to ₹2 lakh
• The tax treatment of the annuity pension will depend on the tax bracket of the account holder

Conclusion

As we live in a digital era, it is always good to proactively strategize for the future. When it is easy, hassle-free, and reliable, then we should not shy away from creating a corpus for our future.