If you’re working as a salaried professional, you may already know about provident funds that your company saves for your retirement. However, with the growing inflation, your PF is simply not enough to help you sustain a comfortable lifestyle post-retirement.
To ensure that you live a financially sound life in your post-retirement period, you need to take action right away and find a suitable investment option that allows you to accumulate a good amount of money. Keeping this in mind, the article will provide you with insights into some of the best pension plans in India for your post-retirement period.
The Indian financial market is filled with various investment opportunities that help you make consistent savings for your retirement. However, not all the options prove to be equally beneficial. Therefore, make sure you read this article till the end and plan an informed and comfortable retirement.
Here are some of the schemes available to you:
Senior Citizen Saving Schemes
The senior citizen savings schemes are one of the safest post-retirement investments, which currently offer returns worth 7.4% per annum. The interest is paid to the policyholder quarterly and is paid by the central government itself.
This provides an assurance of returns, but to be eligible for the payouts, you must progress through a lock-in period of five years. The maximum amount that you can invest in these schemes is INR. 15 Lakhs, and fulfill all your liquidity needs with quarterly returns.
Moreover, these schemes are also eligible for tax deductions under section 80C of the Income Tax Act of India, 1961. The interest rate offered by this scheme is termed as one of the best among various debt-based financial instruments.
Life Insurance Annuities
The annuity plans provided by several life insurance companies require you to invest a lump-sum amount of money and gain regular payouts with additional interest in return. The range of payouts may vary as per your needs, and you can choose from various options such as monthly or annually.
On average, the returns offered by life insurance annuities range between 5.75-5.9% on an annual basis for twenty to thirty years. As compared to senior citizen savings schemes, the returns offered by annuities are greater and more reliable.
However, keep in mind that the entire income you gain from annuities is taxable, and requires you to be at least 60 years old to be able to invest in these schemes. All in all, they’re a good match for living your post-retirement period with comfort.
A lot of financial planners also suggest government securities as a reliable post-retirement investment option, and it is also one of the most prominent alternatives of life insurance annuities, according to experts.
These are sovereign securities with exceptional safety and returns that may range between 6.6 to 6.75%. It also allows you to keep investing for at most forty years, and also provides you the liberty to exit anytime in the event of any sudden requirements.
The returns are paid on a semi-annual basis and as they’re government-linked bonds, your principal amount is completely safe from the volatile conditions of the market. If your main objective with a post-retirement plan is consistent returns, government securities certainly fit the bill for you.
Best Pension Plans in India
As stated above, there are various pension plans available through various companies in India. The rundown here talks about some of the best pension plans in India with unparalleled features and a great return on investment:
LIC Jeevan Nidhi Plan
Being a with-profit plan, the LIC Jeevan Nidhi pension policy allows you to accumulate funds that will be used in the generation of your pension, based on your survival after the end of your policy tenure. All the premiums paid against this policy are free of taxes as well.
With every successful year, you’ll also receive guaranteed additions at a nominal price of INR 50 for the very thousand sums assured for only the first five years. The policy will also take part in the profits after completing five years, depending on the terms and conditions of the provider.
SBI Life Saral Pension Plan
The Saral Pension plan offered by SBI Life is a non-linked, individual, traditional, and participating pension plan that helps you accumulate funds for your retirement without worrying about the volatile conditions and fluctuations of the market.
The best pension plan in features guaranteed bonuses for the first five years of our policy tenure, and you can also be eligible for vesting bonuses after the maturity of your policy. The minimum and maximum policy terms of this plan are ten years and forty years respectively.
Canara HSBC OBC Pension 4 Life Plan
The Pension 4 Life plan by Canara HSBC OBC is an annuity plan that also acts as a monthly income plan by offering you regular payments in your retirement. It allows you to choose from seven different options, based on your requirements and capabilities.
Moreover, the plan assures guaranteed income for a lifetime, credited directly to your savings bank account to help you meet the daily expenses of your life. You can also choose to gain deferred and immediate annuity in case of any urgent need.
While you’re working as a salaried individual, you can easily afford premium payments, unlike old-age where there is no assurance of money flow. That’s why it is suggested to invest in a pension plan as soon as possible to enjoy a comfortable lifestyle in your post-retirement days.
The investment opportunities and plans listed above are perfect for retirement planning as they offer you good returns to cope with the everyday lifestyle after you’re no longer working. Therefore, make sure you have a look at the various plans listed above.
Before making any investment, make sure you assess the particular plan properly to make an informed decision. Moreover, based on your current spending habits, determine whether you need a monthly income plan or a yearly income plan.