Retirement Schemes for Working Indians
Retired population is growing at a rapid pace in India. Such people are worried about their future after retirement. As inflation is growing and their earning dropping, they may like to know how to live a smooth life after retirement.
This concern is growing among every working Indians. They save their hard earned income and invest in financial plans that can give regular returns after their retirement.
It is therefore essential to look at post retirement schemes available to secure bright future after post retirement.
Retirement planning involves well-organized saving; watchful investment to generate sufficient funds to secure a decent post retirement life.
Retirement plans comes with an exclusive lifestyle fund which thoroughly lessens the risk of returns by reducing the equity exposure of investments, gradually throughout the policy period.
There are several retirement plans available to invest the gratuity and provident fund the retirees to receive at the time of retirement. One of the retirement schemes is pension plans that are offered by life insurance companies and provide regular money that may fulfil basic needs of the retiree. Besides there are government-sponsored plans, personal plans, annuities, and employer-sponsored plans.
Government-sponsored plans are the social security plan. Personal plans are the Individual Retirement Agreement (IRA), which are subcategorized according to their tax treatment.
Annuities are another retirement plan. These are contracts established with an insurance company. There are two types of annuities, fixed and variable annuities.
Employer-sponsored plans include qualified and non-qualified retirement plans. Qualified retirement plans meet the Internal Revenue Code requirements and the Employee Retirement Income Security Act of 1974 (ERISA) requirements. Non-qualified retirement plans do not conform to the IRS Code requirements.
These plans provide tax exemption, allowing retiree to deduct annual permissible contributions. Contributions and earnings on such funds are tax-deferred. Some of the taxes can be deferred even further through a transfer into a various type of Individual Retirement Agreement (IRA).
Pension Fund Regulatory & Development Authority (PFRDA) initiated the National Pension System (NPS) covers all concern of the retiree. When a person is making long-term saving plan, charges or cost has great importance. The NPS charges fund management fees of 0.0102% from the government employees and 0.25% from private personnel.
The NPS is very effective, organized and flexible scheme. It has sensible investing standards for fund managers and it’s ITS performance is carefully observed by the NPS Trust, under the general regulation of the PFRDA.
It is generally seen that after retirement some people have positive outlook of life and engage in interesting activities but to some this is worrying period because they do not have any regular source of income.
So in order to avoid such face of life it is advisable to plan investments in post retirement schemes in order to lead a peaceful life.
- Ragini Sinha