Retirement Planning: Why is NPS a support for your old age? These are the 5 benefits that you may not know..

After retirement, everyone needs an income that can run their life comfortably. Earlier, people used to invest mostly in PPF, FD, and pension funds, but the returns from these were low. Now the National Pension Scheme (NPS) has become an option that is not only safe but also gives good returns. Whether you are a government employee, work in the private sector, or run your own business, you can easily contribute to NPS and take advantage of it after retirement. Here are 5 such benefits that you may not know.

1. NPS is systematic and online

The biggest feature of a good pension plan is that it should be systematic and disciplined. In NPS, you can make regular online contributions. After your NPS account and PRAN number are activated, you can make all investments online through the NPS website. You can also view your investment status and market value online, making it easy to manage your account from home.

2. NPS is reliable

NPS is regulated by PFRDA. The full form of PFRDA is Pension Fund Regulatory and Development Authority (PFRDA). It is a government organization established to promote old-age income security. Its main job is to regulate and develop the pension sector of India.

3. NPS is flexible and diversified
Investors expect diversification and flexibility from their investments apart from security and good returns. NPS provides you with all this. All you need is a Permanent Retirement Account Number (PRAN). In NPS, you can choose between active or passive funds. You can also choose between equity, government, and private debt, which gives you the flexibility to change your portfolio according to your risk appetite.

4. Arrangement of both retirement fund and pension
In NPS, you get the option to open two types of accounts. Tier-1 (mandatory, long-term) and Tier-2 (voluntary, withdrawal facility). The best thing about NPS is that through this scheme, you can arrange for both a lump sum amount and a pension at the time of retirement. Out of this, you can withdraw 60% of the amount in a lump sum, and 40% of the fund is used to give you a pension for life.

5. NPS is portable in many ways

One of the special features of NPS is that it is easily portable. Your PRAN is issued not by your employer, but by PFRDA. Therefore, when you resign from your current company, you only need to port your NPS contribution from one employer to another. Apart from this, you can also convert your PF account to an NPS account if you want. Apart from this, investing in NPS also provides tax benefits such as

Exemption of up to Rs 1.5 lakh on investment in NPS under section 80C.

Apart from this, an additional deduction of Rs 50,000 is available under section 80CCD(1B).
Lump sum and pension corpus received at the time of retirement is tax tax-free.

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