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There are numerous private as well as government pension plans offering annuity options for senior citizens that we are discussing in this post. Let’s take a look.
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While considering the best pension scheme for senior citizens, the choice would depend on various factors such as amount to be invested, risk tolerance, your particular need etc. Below are some options of pension plans that can be considered for senior citizens.
The below table shows some of the popular government pension schemes for senior citizens:
Pension Scheme | Age of Entry | Age of Maturity | Policy Term | Tax Benefits |
National Pension Scheme (NPS) | 18 – 70 years | Min. 60 years | Min. 3 years | Available |
Senior Citizens Savings Schemes (SCSS) | 50 to 60 years | Min 65 years | Min. 5 years | Available |
Pradhan Mantri Vaya Vandana Yojana (PMVVY) | Min. 60 years | 70 years and above | 10 years | GST exemption |
Atal Pension Yojana (APY) | 18 – 40 years | 60 years | Min. 20 years | Available |
Employment Provident Fund (EPF) | 18 years and above | 58 years | Min. 50 years | Available (with certain restrictions) |
Varishtha Pension Bima Yojana (VPBY) | Min. 60 years and above | 75 years | Min. 15 years | Available |
Indira Gandhi National Old Age Pension Scheme (IGNOAPS) | NA | 60 years | NA | NA |
NPS is a voluntary contribution scheme linked to the market that supports the investor in saving for retirement. This is a simple and flexible plan that serves efficiently to boost your retirement income. The scheme was introduced by the central government for individuals who want to get an income as a pension to manage their finances after retirement. NPS is available to all the citizens of India including overseas Indians between the age of 18 and 70 years.
Features of NPS:
Also Know: National Pension Scheme
The Atal Pension Plan was launched by the Indian government in the year 2015 to create a system of uniform social security for all Indians, especially the underprivileged and those working in the unorganized sector. Everyone with a bank account can open an APY account in the age group of 18 – 40 years. The plan encourages workers in the unorganized sector to save voluntarily for their retirement.
Features of APY:
Also Know: Atal Pension Yojana (APY)
The Senior Citizens Saving Scheme (SCSS) is another government-backed plan aimed at the elderly residents of India above the age of 60 years. This is a retirement benefit plan offering tax benefits to the investor. Here the investor can invest a lump sum amount individually or as a joint account to receive a regular stream of income in their retirement age.
You may note that the maximum deposit amount under this scheme has been increased from INR 15 lakhs earlier to INR 30 lakhs in the 2023 budget.
Features of SCSS:
Know More: Senior Citizens Savings Scheme
The EPS or Employee Pension Scheme was initiated in 1995 to support organized sector employees to avail of pension after retirement. Eligible employees of the EPF or Employees Provident Fund scheme are eligible to avail of EPS. It is a scheme of social security administered by EPFO or Employees’ Provident Fund Organisation. However, you may note that the scheme benefits are offered to the employee only if they have served a minimum of 10 years of total service years.
Features of EPS:
Read More: Employee Pension Scheme
The PMVVY is another Pension Scheme offered exclusively for the elderly above the age of 60 years. INR 15 lakh is the maximum Investment limit under this scheme that a senior citizen can invest. To avail of the policy benefits, an investor can purchase the plan by paying a lump sum amount. The pensioner can choose between the pension amount or the Purchase Price. This is an insurance cum pension policy that serves as an alternative source of income for the elderly after retirement.
Features of PMVVY:
VPBY is a senior citizen pension scheme aimed at serving citizens above the age of 60 years. The scheme offers income security to the aged with a guaranteed return. Under this plan, pensioners can avail the plan by paying a lump sum amount at the purchase price. The policy will allow the pensioner to avail of a pension on a monthly or annual basis. They may also choose to avail of the pension on a quarterly or semi-annually. The frequency of pension payment can be opted by the investor as per their convenience.
Features of VPBY
IGNOAPS is a sub-scheme of the NSAP or National Social Assistance Program under which Indian citizens who are 60 years and above and are living below the poverty line are eligible to apply for the scheme. Under this scheme, a monthly pension of INR 200 is paid to the elderly for up to 79 years and INR 500 for people of 80 years and above.
Features of IGNOAPS
The table below shows some best annuity pension plans by different insurers:
Plan Name | Entry Age | Maturity Age | Policy Term | Premium Payment Term | Tax Benefits |
SBI Saral Life Retirement Saver | 18 to 65 years | 40 to 70 years | 40 years | Regular or lump sum pay option | Tax exemption available |
Max Life Forever Young Pension Plan | 30 to 65 years | NA | 20 years | NA | Tax exemption available |
ABSLI Guaranteed Annuity Plus | 45 to 90 years | 46 to 90 years | Whole life | Single and limited pay (5,10 years) | Tax exemption available |
HDFC Life Pension Guaranteed Plan | 30 to 85 years | NA | NA | Single pay | Tax exemption available |
IndiaFirst Life Guaranteed Annuity Plan | 40 to 80 years | NA | NA | Single pay | Tax exemption available |
Tata AIA Life Insurance Guaranteed Monthly Income Plan | 6 to 66 years | 65 to 68 years | 5/8/12 years | 5/8/12 years | Tax exemption available |
ICICI Pru Guaranteed Pension Plan | 30 to 100 years | 31 years | NA | Single pay | Tax exemption available |
The SBI Saral retirement saver is a plan that guarantees a retirement corpus to the investor to guarantee financial independence to the person. It is an individual plan in the non-linked and participating category. Being a pension product, it ensures a worry-free life after retirement in terms of financial needs.
Features of SBI Life Saral Retirement Saver:
This is a single premium plan in the non-participating and non-linked category offering regular income as an annuity for a lifetime. The plan comes with wide options of annuity to serve the needs of different People. You can avail of the plan based on single or joint life to get immediate or deferred annuity.
Features of HDFC Life Pension Guaranteed Plan:
Here is another pension plan that guarantees a stress-free income for an investor and his/her spouse. This is a unit-linked individual pension plan in the non-participating category that supports the creation of a corpus for retirement while safeguarding the insured from the financial turmoil of the equity market. It also offers added annuity benefits to protect the spouse and family against unforeseen occurrences.
Features of Max Life Forever Young Pension Plan:
This is another retirement plan that ensures regular income to the investor and family with guaranteed monthly pay. The plan supports the investor in everyday expenses along with offering assured life cover. It comes with a flexible payment option of monthly, quarterly, semi-annual, and annual.
Features of Tata AIA Life Insurance Guaranteed Monthly Income Plan:
This annuity policy is crafted to ensure regular income to the insured throughout life. This plan helps in coping with the healthcare costs of investors and keeping abreast with inflation even during the retirement period. The plan offers 12 annuity options to choose from to get assured regular income.
Features of IndiaFirst Life Guaranteed Annuity Plan:
Another good pension plan for the elderly, the Aditya Birla Sun Life Insurance Guaranteed Annuity Plan is available with guaranteed income for a lifetime of the insured and the spouse. So, until the investor or his/her spouse is alive the plan will regularly pay pension. This plan allows guaranteed income for life to let you enjoy the retired life of your dreams.
Features of the ABSLI Pension Plan
With ICICI Pru Guaranteed Pension Plan, you can secure your life post-retirement with an assured and regular income. All you need is to invest once and you can choose to start receiving the regular income on a monthly, quarterly, or even six-month or yearly basis. This is an insurance cum pension plan.
Features of ICICI Pru Guaranteed Pension Plan
To Sum Up
The increase in the population of senior citizens in India makes it important for people to take a holistic approach to secure their financial life after retirement with senior citizen pension schemes. There are several good pension plans offered by both government and private insurance companies to fulfil the needs of the senior citizens. Further, the government of India offer some free pension for senior citizens in India, especially for the poor and economically deprived old people, which can be availed by the needy.
It is necessary for every individual to subscribe to at least one pension plan to make sure that the flow of money keep coming after their retirement.
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Yes, there are several pension plans for senior citizens offered by the government of India as mentioned below:
1. National Pension Scheme (NPS)
2. Atal Pension Yojana (APY)
3. Senior Citizens Savings Scheme (SCSS)
4. Employees Provident Fund (EPF)
5. PM Vaya Vandana Yojana (PMVVY)
6. Indira Gandhi National Old Age Pension Scheme (IGNOAPS)
7. Varishtha Pension Bima Yojana (VPBY)
The PMVVY or the Pradhan Mantri Vaya Vandana Yojana is the new pension scheme introduced on 4th May 2017 by the government for senior citizens in India. The scheme was extended till 31st March 2023 for people above 60 years.
Atal Pension Yojana (APY) is one of the best government schemes for people in the unorganized sector. Under this plan, the beneficiary as well as the Government of India pay a share of the premium. NPS and IGNOAPS are other such good pension plans offered by the government.
Here are the necessary documents to apply for a pension plan:
# Birth certificate
# Bank account details
# Papers of ITR
# ID proof
# KYC documents
Yes, a pension scheme for senior citizens is better than savings. That is because pension plans allow financial stability for old age. Savings plans offer low returns as compared to pension plans, which help in building a corpus with long-term investment.
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