New Pension Scheme - Retire Well

There was a man living in his late 50s, he had a daughter to get married, a son in his graduation and a wife and he is the only earning member in the family. He had to plan for so many things lined up and most of them are cost heavy. Now there can be two possibilities- the man had done initial investments (stocks, real estate, mutual fund etc) and he sells them and take returns to satisfy the needs along with his savings from the salary. The other situation is that he has planned everything systematically and opted for NPS. He knew how much he would need in future for big expenses like child education, marriage etc. Finally, the man retires- son and daughter both married and living outside India happily. The man now has no earnings in case 1 as he had sold his investments. But in case 2 even though he sold his properties at the time of need, he will get monthly income due to NPS. He still can earn his living without tension and the man along with his wife enjoy their senior citizen life.

The purpose of life is to live a healthy living, eat meal two times a day, keep your family happy, satisfy their needs and earn- how much? The nature says that we are never satisfied with what we get and on how much we wish to earn. But we have options till we have a job, business men are exceptions in this situation. Imagine you are working in a small shop or any unorganised sector and you turn 60. What next? No job, no earnings, what will happen to your family. Here is an illustration to this.

Nothing bad will happen because here is scheme which will provide regular (monthly) income to your family once you retire. This scheme is NPS-New Pension Scheme. It has been introduced by Government of India for providing pension benefits to the common man specifically to those who are self-employed like barbers, shopkeepers, etc. and to those who work in unorganized sector. Under this scheme, individual has to regularly invest some amount and he will get some fixed amount at the time of retirement as income. There are various benefits and what better than this would serve your purpose. It is like you get a reward of your job for the hard work and your contribution to the company.

It is open for every citizen of India and you can opt for this scheme easily and conveniently. It is very flexible and regulated by PFRDA (Pension Fund Regulatory and Development Authority) which is a transparent regulatory body. Hence, you are secured and keeps a monitor check on the happenings and proceeds. Thus, it is highly genuine and trust worthy. Any person from the age 18 to 60 can opt for this scheme. But when there is an undischarged solvent, unsound mind person or might be a pre-existing account holder of NPS, he/she is not eligible for NPS.

Next section is about opening of NPS account. It is simple indeed. Two types of account can be opened under NPS Scheme i.e. Tier 1 and Tier 2.Tier 1 says that the amount can be withdrawn by the NPS account holder up to the age of retirement i.e. 60 years and Tier 2 account subscribers are free to withdraw their savings as per their requirements.

Everything basic thing is discussed but major question striking your mind would be how much amount to be contributed. So, there is a minimum limit of Rs 500 per month or Rs 6000 per year. The minimum contribution has to be of 1 year. There is one flexibility out here in case of withdrawal. There is an option to withdraw early i.e. before the age of 60. It might be due to some urgency because of severe illness, big expense coming your way, sudden death or mishap. And the other is of course to withdraw when you retire normally at the age of 60. In a country like India, where social security schemes are practically non existent for those in the unorganized sector