HOW TO BENEFIT BY INVESTING IN NPS FOR RETIREMENT GOAL

For the starters, NPS is a retirement focused scheme regulated by a statutory body, Pension Fund Regulatory and Development Authority (PFRDA).

- Sanjeev Puri

NPS is a defined contribution schemes i.e. what an investor accumulate and get as pension after retirement is depended on how much is put into the scheme. The return, therefore, is not guaranteed but depends on performance of underlying assets. What makes NPS stand out amongst several other investment alternatives are its low-cost, easy accessibility and an option to build a corpus through market-linked asset classes.

Anyone between the ages 18-65 can join NPS, with a minimum investment of Rs 1,000 a year after fulfilling the KYC requirements. One gets a Permanent Retirement Account Number (PRAN) which captures all the data including personal details and transactions. At age 60, the contributions stops and one is allowed to withdraw up to 60 percent of the corpus while annuity starts on the balance 40 percent of the NPS corpus from any of the designated annuity providers.