Let’s face a fact – everybody of us wants to live a financially independent life after we retire from work. We have all those dreams of spending vacations abroad and pursuing the long-lost hobbies that we could not pursue because of the regular job we have right now. However, for this, you need to plan your retirement very carefully. Obviously, when you are not working or you are a retired individual, you can’t expect any kind of paycheque in your account. That is why there are various pension plans that are specifically for people over the age of 60 who are not actively working. But if you want to know which kind of pension plans would be suitable for you, then keep reading for the types of these!
1. The National Pension Scheme — The National Pension Scheme is a centralised plan provided by the Government of India for various workers at different jobs. It is controlled by the Pension Fund Regulatory and Development Authority. When a person opts for NPS, they have to start contributing for the same during the years they are working at Government offices and other services. Basically, it is a fixed sum deducted from your salary each month and it is invested either in the mix debts or equity funds. When you reach retirement age, you can easily withdraw a lump sum amount for yourself and keep the rest of it for your periodic annuity payment.
2. The annuity plans — The annuity plans also provide you with a very good retirement cover. The annuity plan is divided into two parts – the immediate one that lets you pay a specific amount and start getting the monthly or annual annuity immediately. And the other is the deferred plan in which you make an investment either as a lump sum amount or in period cycles, but it is for a fixed duration. Then you start receiving the monthly amount only after a specific amount that is agreed upon on the contract by you.
3. Pensions plan that also offers life cover — Some of the pension plans that you choose not only offer you a monthly or annual income in your account after you retire but also prove to be a very good life insurance policy for your family members. With the pensions plan, one part of your amount is kept securely for your life insurance coverage. And the other section is invested in your preferred fund. In the pensions plan, you get a monthly annuity after you turn 60. And if any unfortunate incident occurs with you, your nominees receive the insurance amount as well.
Since now you are aware of all the types of pension plans available for your retirement, it is important that you make your decision very wisely. The plan you opt for is going to decide your future when you don’t have any other financial resources, it is going to impact your lifestyle a lot.