The Retirement pressure for an Indian citizen is about to get over because the Pension Fund Regulatory and Developing Authority has raised the entry age up to 65 years. That means, now you have an option to save your retirement savings under the National Pension Scheme even after you reach at an age of 60 years. Earlier the age limit for the National Pension Scheme was 18 years to 60 years.
While the entry age has been raised, on the other hand, the maximum age limit for the National Pension Scheme will remain unchanged. The maximum age limit of the National Pension Scheme is 70 years. The notification will be declared shortly says, Contractor. Thus, the person who chooses to join at 65 years of age can have a 5-year accumulation period under NPS.
The main reason to conclude under the decision to change the entry age for the Pension Scheme was due to the number of feedbacks screaming at the doors of PFRDA. People wanted to enjoy the benefits and showed interest to save their retirement savings as early as possible.
Another leading reason for this decision is, most of the people nowadays have stopped working when they reach 60 or they get retired when they become 60 years. So the PFRDA group thought that this could be a good idea to make a little change that can benefit the Senior citizens of the society.
The NPS Rules entitles the scheme that a subscriber can join up to 60 years and can continue to enjoy this scheme till 70 years of age and can keep on contributing. They also have an option to buy bonus and premiums that can be delayed for three years 60 to 63 years.
The NPS is slowly emerging as a strong source of investment for the senior citizens of the society. It is open to all the citizens of India to move a step and start an initiative for a better choice of investment. The investment equity of a subscriber’s fund under NPS can hike up to 70%.
The subscribers can choose Tier-I account with withdrawal restrictions otherwise can go for Tier II which is mainly a voluntary savings facility and is freely withdrawable. The Tier I come with tax benefits included whereas, Tier II has no tax saving for money invested.
The contribution amount for the Tier I at time of account opening and all the subsequent amounts is Rs 500 and minimum annual contribution is Rs 1000, whereas for Tier II Rs 1000 is the minimum amount of account opening and Rs 250 is the subsequent amounts has to be invested each time. There is no minimum contribution requirement in Tier II.