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Life is a beautiful gift, and age is just a number. If you approach life with a positive outlook, everything you encounter and feel can be positive and joyful. Your thought process and mindset play a big part in how happy you are, so it all depends on those. Although the legal retirement age is 60, you can still be young at heart after that age.
Retiring from work doesn’t mean retiring from life! One has to have a retirement plan, as it is a crucial aspect of financial management that often gets overlooked. As we navigate through the various stages of life, it becomes important to secure our future and ensure a comfortable retirement. One such avenue that has gained significant popularity in recent years is the National Pension System.
An early retirement plan is a type of investment strategy in which the retiree sets his retirement income goals and determines how to achieve them. The retirement plan can also help in managing your and your family’s post-retirement expenses, such as health and medical costs, lifestyle costs, etc., while considering the risks and amount of investment required.
The National Pension System comes with various features and benefits. Wondering what they are? Let’s discuss them briefly.
Features of the National Pension System
- Portability – NPS is a portable pension system, so members can keep contributing even if they change jobs.
- Choice to choose – Investment options are available through NPS, allowing subscribers to select their preferred mix of government securities, corporate bonds, and equity investments.
- Management of the fund – Managers of pension funds oversee the investments made with subscriber contributions.
- Convenient – Subscribers can invest in NPS on a monthly basis through a systematic investment plan, which can assist them in building a corpus over time.
- Low cost – Due to its reputation for affordability, it is a desirable choice for long-term savings.
Benefits of the National Pension System
- Tax benefits are available for contributions to the NPS under Section 80C of the Income Tax Act, and there are also additional deductions available under Section 80CCD (1B).
- Subscribers can withdraw up to 60% of the corpus as a lump sum on retirement and use the remaining 40% to buy an annuity, which provides a regular income.
- Market-linked returns are offered to subscribers by NPS, which invests in a variety of government, corporate, and equity securities.
- Subscribers have flexibility in terms of pension income because they can select from a variety of annuity plans and providers.
- NPS sends account statements to subscribers on a regular basis, allowing them to monitor their pension savings and investment performance.
Conclusion
Overall, with its diverse investment options, tax benefits, and annuity choices post-retirement, the National Pension System provides individuals with a comprehensive platform for long-term financial planning and security.
