My Retirement Goals

  • Akshatha Sajumon
  • 11 Jun
  • 5 minutes

retirement

“It’s better to live rich than to die rich”.

How do we know that when we hit sixty-five or seventy or eighty, there will be a skill that can throw off an income? We need to create a retirement corpus so that by age sixty we are financially free. A person is financially free when you don’t need to work to pay your bills. You should have enough assets that generate enough income today and for the rest of your life. We all know inflation is relentless, and even when the rate of inflation falls it does not mean that prices go down. They just rise more slowly. Getting the right amount of retirement is not tough to crack.

At the age of twenty-five save 25 percent of your post-tax income, at age thirty save 30 percent of your post-tax income, At forty save 40 percent. This formula works if you don’t have a single rupee saved towards your retirement, till you are forty.

Here are the retirement plans one should invest for better returns.

1. NPS(National Pension Scheme)

The national pension scheme is initiated by the central government. This scheme is where a person needs to invest in a pension account at regular intervals when the employee is working. This program is open for employees from private, public, and even for those who are working in the unorganized sector. After being retired the person can withdraw a certain amount of percentage of their funds. Wherein the person gets benefit under section 80C and section 80CCD. This scheme is portable across all the locations.

Types of NPS account

There are basically two types of NPS and they have the tire I and Tier II.

Basic information for a Tire I

  • There is no limit of the Maximum NPS contribution.
  • The maximum NPS contribution should be Rs. 250 or Rs. 500 or Rs 1000.
  • One can get tax exemption up to Rs 2 lakh (Under 80C and 80CCD)
  • There is no permit for withdrawals.
  • The status of the tire I account is Default.

NPS Tier II account

  • There is no maximum limit for NPS contribution.
  • The minimum contribution should be Rs. 250
  • There is tax exemption up to 1.5 lakh for government employees other employees.
  • For withdrawals, you are permitted here.

NOTE: The tire-I account is mandatory for everyone who opts to invest in the NPS scheme. The central government has to contribute 10% of their basic salary. For the rest of everyone else, investing in NPS is their call.

How to open an NPS account:

NPS account is been regulated by PFRDA, one can go for online as well as offline to open this account.

Offline process

The person needs to pay a fee of Rs. 125 for this.
One needs to make an investment not less than Rs. 250 or Rs. 500 or Rs. 1000 annually.
To open the NPS account manually, one should find PoP- point of presence.
Remember one should update their KYC papers in a bank.

Online process

One can invest in NPS through Fisdom .
All that you need to do is download Fisdom app, which is India’s most trusted app, update your KYC and start investing your funds in NPS.

Fisdom  app

2. Senior citizen savings Scheme (SCSS).

The senior citizens saving scheme is a scheme protected and backed by the government of India to provide regular income for senior citizens of India. Since it is provided by the government of India, this scheme is tax-free, which is been preferred amongst the retired audience.

Who can invest in these?

  • Senior citizen of India is eligible for SCSS.
  • Senior citizens of India aged 60 years or above.
  • Retirees who have opted for voluntary retirement scheme (VRS). Or superannuation in the aged bracket 55-60.
  • Retired defense personnel with a minimum age of 50 years.

Note: HUFs and NRIs are not allowed to invest in this scheme.

What should my investment amount be?

1. The minimum amount required for investment is SCSS is Rs 1000.
2. The maximum amount should be lower of the two:

  • An individual can invest up to 15 lakhs.
  • An individual can invest the amount received as a retirement benefit.

If its joint account with a spouse, then the maximum amount is 30 lakhs.

The interest rate on the SCSS account.

Interest rate

How to open an account in SCSS?

  • SCSS account can be opened in any authorized bank or post office.
  • First, the person has to fill a document for opening an SCSS account.
  • Proof-like PAN card, a passport to be presented
  • Two passport size photos.

Note: have original identity proof for verification.
Hence it’s clear that NPS provides all the features that SCSS can provide. Also, NPS allows you to earn returns anywhere between 9-15% whereas SCSS helps you earn between 8-9%. Why miss out on the opportunity to earn those extra returns? Additionally, NPS provides tax benefits where one can secure the future after retirement. You can invest your funds through Fisdom after all one should spend their retirement peacefully.
Invest in NPS on Fisdom and enjoy a tension free retirement.

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Akshatha Sajumon