Pension Yojana: In today’s fast-paced life and rising inflation, the biggest question is how to manage expenses after retirement. Investing in the stock market is risky, and bank interest rates can change at any time. Therefore, most people want a plan where their money is completely safe, and they receive a fixed income every month in their old age. To fulfill this need, the Central Government’s Atal Pension Yojana has emerged as a reliable option.
What is the Atal Pension Yojana?
The Atal Pension Yojana is a social security scheme run by the government, which provides a fixed monthly pension after the age of 60, based on the investment made. Under this scheme, an individual can receive a guaranteed monthly pension ranging from Rs. 1,000 to Rs. 5,000. Due to the government guarantee, the risk is almost negligible, which is why young people are also rapidly joining this scheme.
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The big advantage of investing at a young age
The biggest feature of this scheme is that the earlier you start investing, the lower the monthly contribution. If a person starts investing for a Rs. 5,000 pension at the age of 18, they have to deposit a very small amount every month. However, if the same investment is started at the age of 40, the monthly contribution becomes significantly higher. This is why those who start early benefit the most from this scheme.
Government guarantee ensures pension security
What sets the Atal Pension Yojana apart from other investment options is its government guarantee. Returns in the stock market or mutual funds depend on market performance, but this is not the case with this scheme. Even if the returns from the pension fund are low in the future, the government will still contribute its share to provide the fixed pension. Whether the market goes up or down, your pension remains fixed.
Pension, along with tax relief
This scheme not only helps with retirement planning but also helps in saving taxes. The amount deposited in this scheme is eligible for tax exemption under Section 80C of the Income Tax Act. In addition, you can also avail of additional tax benefits under Section 80CCD (1B). This means that your future is secured on one hand, and you save on taxes on the other.
Benefits that make the scheme special
If the pensioner passes away, the same pension continues to be paid to their spouse. After the death of both, the entire accumulated amount is returned to the nominee. This scheme offers an auto-debit facility, eliminating the need to visit the bank every month. Investors can also increase or decrease their pension amount once a year. The scheme is completely transparent, and investment-related information is provided via SMS. The long-term investment also benefits from compounding, allowing even small contributions to grow into a substantial fund over time.
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Who can invest?
Only individuals aged between 18 and 40 years can invest in the Atal Pension Yojana. A valid savings bank account is mandatory. Since October 2022, income taxpayers are not eligible to join this scheme, as it is primarily designed for the unorganized and low-income segments of society.
A strong support system for old age
The Atal Pension Yojana is not just a government scheme; it is a strong support system that provides financial security in old age. If someone wants to secure their future without any risk, this scheme can prove to be an excellent option.