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23rd Jul 2021

Best Govt. Pension Schemes for Senior Citizens

Investing in a Retirement plan had never been a priority amongst Indians. In catering to children’s needs and securing the family future, people spend most of their earnings.

Nearing a retirement age only makes one realize that financial instability is at the door. Prone to health concerns in old age, with depleted energy levels to earn a monthly salary like before, our senior citizens find themselves more burdensome than relieved of their duties at the brink of retirement.

Comes to the rescue is the Government of India, with their various pension schemes for senior citizens. These government schemes for senior citizens are designed to provide a certain amount to the subscribers, to help cover the necessities in old age and to eliminate dependency.

A survey also suggested that half of the Indians don’t even know about various pension schemes offered by the government. But don’t worry, at Emoha, we have made sure to bring all the details and information in one place.

Let’s know about the best government pension schemes for senior citizens: –

National Pension Scheme (NPS)

NPS is one such pension scheme for senior citizens with tax benefits under various sections by the Government of India.

Eligibility and Features

1.    Any Indian citizen between the age of 18 and 65 can apply with mandatory contribution till the retirement age of 60 years.
2.    Pre-mature withdrawal is allowed up to 20% of the contribution made, and only after three years.
3.    40% of the corpus is tax-free at maturity. Out of the remaining 60%, another 40% is tax-exempted if the amount is used to buy the annuity. However, the annuity income will be taxed.
4.    With exemptions under section 80C, 80CCC, and section 80CCD(1) and an additional tax benefit of INR 50,000 under section 80CCD(1b) makes NPS one of the best tax-saving schemes for senior citizen.

How to apply

•    Online mode > Go to NPS website > https://enps.nsdl dot com and get register to fill the online subscriber form. Get your Permanent Retirement Account Number (PRAN) opened.

Indira Gandhi National Old Age Pension Scheme (IGNOPS)

IGNOPS, also known as National Social Assistance Scheme, was launched by The Ministry of Rural Development of India in 2007. One of the best pension schemes for senior citizens, widows, and disabled people who come under low-income or below the poverty line.

 Eligibility and Features

1.    Subscriber must be 60 years of age or higher for IGNOPS, whereas the age limit is 40 to 79 years for widows and 18 to 79 years for a disabled person.
2.    Must hold a Below Poverty Line (BPL) ration card.
3.    Must be having no other source of income.
4.    The beneficiary aged between 60-79 years receives INR 300 into his/her bank account while it is INR 500 for people aged 80 years or above for IGNOPS.

 How to apply

•    Offline mode > Visit Social Welfare Office in rural areas, and District Social Welfare office in urban areas.

Pradhan Mantri Vaya Vandana Yojna (PMVVY)

PMVVY, also known as the LIC pension plan for Senior Citizens, is a scheme distributed by the Life Insurance Corporation of India (LIC). It is designed to provide financial stability and independence, post-retirement.

Eligibility and Features

1.    Applicable for any Indian citizen above 60 years old.
2.    It provides an assured return of 8% per annum on the deposit, for 10 years
3.    It has an exit option in case of an emergency. 98% of the deposit can be withdrawn, while 2% goes as a penalty.
4.    The maximum investment is capped at 15 lacs.

 How to apply

•    Offline mode > Visit any LIC of India office nearby to apply.
•    Online mode > Visit the website https://licindia dot in, and go to the ‘products’ tab and select ‘Pension plan’ to find and fill the application.

Atal Pension Yojna (APY)

APY, launched in the year 2015, mainly targets the unorganized sectors of India. In this senior citizen pension yojna, even the government co-contributes a certain amount into the subscriber’s deposit for five years to enhance the benefits.

Eligibility and Features

1.    Applicable for an Indian citizen between the age of 18 to 40 years who comes under no tax bracket.
2.    The subscriber will start receiving the pension after attaining 60 years of age.
3.    Atal Pension Yojna assures fixed monthly pension for senior citizens between INR 1000 to INR 5000 post-retirement.

 How to apply

 •    Offline mode > Visit your respective account holding bank. Fill the APY form and submit it to the bank in person. Once the APY account is opened, you can check and enjoy the benefits of this scheme.

Varishtha Pension Bima Yojna (VPBY)

VPBY is a LIC of India pension plan for senior citizens that not only provides social security but also guarantees a fixed rate of return of 8%, for 10 years. Let’s look at more features of this fantastic pension scheme for senior citizens.

 Eligibility & Features

1.    Available only to Indian citizens above 60 years of age with no maximum age limit.
2.    All the premiums enjoy tax exemption under section 80C of Income Tax.
3.    The premium and the pension payment will be done through NEFT or ECS and not cash.
4.    A fixed 8% rate of return makes this pension scheme the best return of investment pension schemes.
5.    The pension is payable with an immediate annuity payment for better financial independence.

 How to apply

•    Online mode > Visit the LIC website and download the VPBY. Take a printout, attach self-attested relevant KYC documents. The application needs to be submitted to the LIC office in person.

Also, the nominee feature covers all the above pension schemes wherein the principle amount is payable to the nominee in the unfortunate event of the subscriber’s death.

With many savings options for elders like post office senior citizen saving scheme, investing a suitable amount in the government-backed pension schemes above can assure a financially smooth post-retirement life. We all at Emoha wish you a joyful and sound retirement. #EldersFirst.