People’s interest has increased in savings and investment. But, retirement planning is not included in their priority. This information has been obtained from a study by Max Life Insurance. Nearly 50 per cent of the respondents believed that their savings would barely last 10 years after retirement. About 31 people said that they do not know how much money they will need after retirement and how big their retirement fund should be. However, 44 per cent of the respondents felt that retirement planning should start before the age of 35.
Government Schemes
Ranbhir Singh Dhariwal, CEO of Max Life Pension Fund Management, said that NPS can prove to be very helpful in retirement planning. He said that awareness about NPS is increasing among the people. In the last three years, awareness has increased by 59 per cent to 70 per cent. In tier 2 cities, it is 78 per cent. He said that there are many options in NPS, which give an opportunity to build good wealth in the long term. This is a government scheme, so it is easy to trust it.
Excellent returns in the long term
Nearly 90 percent of the people involved in the study believed that NPS is a safe and reliable option for retirement planning. Dhariwal said that one of the great features of NPS is that it is the lowest cost retirement scheme in the market. This means that most of the subscriber’s investment money is used to create a good fund in the long term. Due to being linked to the market, its returns are very good in the long term. In this, subscribers can choose the option according to their ability to take risk.
Withdrawal facility if needed
NPS is also attractive in terms of liquidity. The subscriber can withdraw 25 percent of the fund three times if he needs money. In a way, it is like an emergency fund for subscribers. It also gives subscribers a chance to save tax. This is the only investment product in which deductions are allowed under the new income tax regime. Self-employed people along with salaried people are allowed to invest in NPS. An investment of at least Rs 1,000 can keep the NPS account active.
