People in India do not pay much attention to retirement planning. People plan to go for a holiday, buy a car-house and marriage, but do not think about retirement planning. It is dangerous to do so. Not doing retirement planning at the right time may have to face problems later. After retirement, he may face a shortage of money for the necessary expenses. The National Pension System (NPS) presents a solution to this problem.
Long period is ready
National pension system ,NPS) Retirement is smart, stable and secure solution for later expenses. NPS is different from the second option of investment in the case that it has been designed for solution of later retirement expenses. In the long term, NPS gives you the opportunity to prepare a large fund until retirement. Investors can contribute to NPS according to their capacity.
Very attractive in terms of tax benefits
A major advantage of investment in NPS is its tax benefit. If you use the Old Rizim of Income Tax, you can claim an additional Rs 50,000 deduction under section 80ccD (1B). It is different from deductions up to Rs 1.5 lakhs received under section 80C. The attraction of NPS increases due to this tax benefits. At the time of retirement, you can get 60 percent of the fund prepared under NPS at the time of retirement. It is completely tax-free. The remaining 40 percent of the funds are used to buy annuity, which will give you pension every month.
Fund management cost quite low
NPS is the lowest cost retirement product. Annual fund management charge is only between 0.2 and 0.25 percent. This mutual funds companies are much lower than the charge in the fund management to be recovered from the companies. In the long term i.e. 20-30 years, the return of subscribers increases significantly due to this low cost.
18 year old person can start investing
An 18 -year -old person can start investing in NPS. This gives the NPS a chance to prepare a big fund for his future at a very young age. The second major benefit is of asset allocation. If you have an understanding of the world of investment, then you can choose an active choice option. In this, your money will be invested in share, corporate bonds and government securities. If you do not know much about asset allocation, then you can use the Auto Choice option.
ALSO READ: ITR Filing 2025: Senior Cities get many types of deeds and exhalations, definitely know them before filing ITR
You can invest according to financial goals
It is necessary to have NPS in a person’s retirement plan. You can also invest in mutual funds, fixed deposits and real estate according to your financial goal. If you find it cumbersome, you can take help of an investment advisor. Experts say that the more retired planning is started, the higher the benefit.