Retirement Fund Planning via PPF and SSY @age of 35 Years

Some good schemes from Govt of India like PPF and SSY:

1. At age of 35 years open PPF account on self with 10000/- per month contribution for 15 years yields 36,00,000/- at the age of 50 Years. The money you will get is EEE (contributed amount is Exempted from tax, Accrual Interest is Exempted from tax, withdrawal amount after 15 years is also exempted from wealth tax).

https://www.icicibank.com/Personal-Banking/investments/ppf/index.html



2. At age of 35 years open SSY account on girl child with 10000/- per month contribution for 15 years yields 57,00,000/- after 21 years from account opening date. The money you will get is EEE (contributed amount is Exempted from tax, Accrual Interest is Exempted from tax, withdrawal amount after 21 years is also exempted from wealth tax).

Terms and Conditions of SSY :

Deposit threshold and tenure:

Minimum of Rs 250 (this amount was previously Rs 1,000) and maximum of Rs 1,50,000 in every financial year, up to 15 years

Closure on maturity

Account matures after completion of tenure of 21 years and balance in SSA including interest is paid to the child on submitting an application and proof of identity, residence, and citizenship documents
Premature Closure Allowed only in the following situations:

Reasons of intended marriage after a girl child attains the age of 18 years makes an application between one month prior to marriage and 3 months after marriage along with her age proof documents
Death of girl child on the production of the death certificate and balance in the SSA will be paid to the guardian
Deemed closure in case of a change in the status of girl child i.e., girl child either becomes non-resident or non-citizen of India. Such status change shall be communicated by girl child or guardian within one month of status change
After completion of 5 years from the opening of SSA, if post office or Bank is satisfied that operation or continuation of SSA is causing undue hardship to the girl child (such as the death of the guardian, medical reasons of girl child), the girl child or guardian may order for premature closure
For any other reasons, if SSA is to be closed anytime after the opening of SSA, it will be permitted, but the entire deposit would earn interest rate applicable to post office savings bank

Withdrawal is allowed for higher education purpose if girl child has either attained 18 years or completed 10th standard for meeting actual fee or other charges required at the time of admission
Documentary proof by way of a confirmed offer of admission in an educational institution or fee slip shall accompany the application for withdrawal
Withdrawal has a maximum cap of 50% of the balance in SSA at the end of preceding financial year and can be made in either one lump sum or in 5 installments not exceeding one installment per year
Transfer of Balance in SSA : Balance in SSA can be transferred anywhere in India and from or to post offices, from or to banks, and between post offices and banks for free of cost, upon furnishing of proof of change of residence of either guardian or girl child. Under any other circumstance, such transfer can be made by paying a fee of Rs 100.

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LIC Jeevan Akshay VI

Introduction:
It is an Immediate Annuity plan, which can be purchased by paying a lump sum amount. The plan provides for annuity payments of a stated amount throughout the life time of the annuitant. Various options are available for the type and mode of payment of annuities.

Options Available:

The following options are available under the plan

Type of Annuity:

1. Annuity payable for life at a uniform rate.
2. Annuity payable for 5, 10, 15 or 20 years certain and thereafter as long as the annuitant is alive.
3. Annuity for life with return of purchase price on death of the annuitant.
4. Annuity payable for life increasing at a simple rate of 3% p.a.
5. Annuity for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
6. Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
7. Annuity for life with a provision of 100% of the annuity payable to spouse during his/ her life time on death of annuitant. The purchase price will be returned on the death of last survivor.

You may choose any one. Once chosen, the option cannot be altered.

Mode:

» Annuity may be paid either at monthly, quarterly, half yearly or yearly intervals. You may opt any mode of payment of Annuity..

Salient features:

1. Premium is to be paid in a lump sum.
2. Minimum purchase price :
   Rs.100,000/- for all distribution channels except online.
   Rs.150,000/- for on line sale.
3. No medical examination is required under the plan.
4. No maximum limits for purchase price, annuity etc.
5. Minimum allowed age at entry is 30 years (completed) and Maximum allowed age at entry is 85 years (completed).
6. Age proof necessary.
7. Annuity Rate:
   Amount of annuity payable at yearly intervals which can be purchased for Rs. 1 lakh under different options is as under:

   Age last birthday	Yearly annuity amount under option
   	( i )	( ii ) (15 years certain)	( iii )	( iv )	( v )	( vi )	(vii)
   30	6750	6730	6430	4870	6640	6530	6410
   40	7080	7020	6470	5230	6870	6680	6430
   50	7710	7530	6520	5900	7330	6990	6470
   60	8930	8390	6600	7140	8220	7620	6530
   70	11650	9460	6730	9820	10130	8970	6620
   80	17410	10080	6920	15440	14170	11940	6760

   Incentives for high purchase price:
   
   If your purchase price is Rs. 2.50 lakh or more, you will receive higher amount of annuity due to available incentives. In addition of this, for policies sold online, a rebate of 1% by way of increase in the annuity rate shall also be available.

Service Tax:

Service tax, if any, shall be as per the Service Tax Laws and at the rate of service tax as applicable from time to time.
The amount of service tax as per the prevailing rates shall be payable by the policyholder along with the purchase price.

Paid-up value:

The policy does not acquire any paid-up value.

Surrender Value:

Surrender shall be allowed after completion of atleast one policy year only for Annuity Option – “Annuity with return of purchase price “under any of the following circumstances.

A. If the annuitant is diagnosed as suffering from any of the following critical illnesses: 

Cancer etc..

References:

https://www.licindia.in/Products/Withdrawn-Plans/jeevan_akshay

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Best Retirement Plan @ age of 35Years

Enter age as 35 years and monthly contribution as 4000/- in below link to get approximate benefits @60 age. 40% lumpsum amount is non taxable and 40% is must to invest in pension annuity fund and remaining 20% you have option to invest either in Annuity or withdraw (wealth tax applicable for withdrawals). Monthly Pension paid is taxable based on tax slabs.

http://www.npstrust.org.in/content/pension-calculator

Step 1: Invest 10,00,000/- in Bank as FD to get returns of 5000/- per month on the name of non-earning family member to avoid TDS.
Step 2: Use this 5000/- amount to invest 4000/- in NPS and 1000/- in APY respectively per month till account holder age becomes 60 years. In NPS opt for 60% Annuity Value(30Laksh) and 40% Lump Sum value(20Lakhs) to be withdrawn (tax free) at the age of 60 Years.
Step 3: Pension Returns at the age of 60 Years in terms of pension amount

  5000/-  pension per month @60Years for investment of 1000/- per month towards APY
15000/- Pension per month @60Years as annuity from NPS with monthly contribution of 4000/-
10000/- Pension per month @60Years by reinvesting 40% of lumpsum in NPS (i.e. 20,00,000) in LiC
  5000/- return of monthly interest for 10 Lakhs invested in Step 1 above.
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35,000/- in total Pension per month
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On expiry of member his Life Partner will get same amount as pension.

On expiry of life partner, the nominee / last survivor can fetch
  8,70,000/- for APY
30,00,000/- for Annuity fund Principal of NPS
20,00,000/- LiC Vayo Vandana yojana principal reimbursement to nominee
10,00,000/- Bank F.D. invested by member in Step 1.
------------
68,70,000/-   Total payment to children/family members / nominee
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regular monthly contributions to NPS Tier 1 is not mandatory, only 1000/- per year is compulsory if you want to contribute the way mentioned above, it is out of your own interest and availability of funds in that month. There is no upper limit on contributions, however only 50000/- is exclusively considered for IT exemption under 80CCD.You may wonder why i mentioned 4000/- per month, why not 40000/- per month, the reason is 4000x12 = 48000/- ~= 50000/- IT Exemption allowed. Though you invest 48000/- to your retirement pension, you can get tax benefit for 30% of 48000/- = 16000/- per year. It means you invest only 32000/- per year to create wealth of 50Lakhs(approx) when you retire.

References:
faqs on NPS Tier 1 Contributions: 

https://www.npscra.nsdl.co.in/all-faq-contribution.php
https://enps.nsdl.com/eNPS/NationalPensionSystem.html

Always remember that there are only two scenario's that can hit our Happier Life:
1. If you are under lived before your 60 years of age, take a Term policy worth of 5 to 10 times of your annual income to take care of your family members.
2. if you are over lived above your 60 years of age, take retirement pension plan like NPS Tier 1, NPS Lite/APY, PPF, SSY etc to take care of yourself without expecting to depend on your family members.

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Atal Pension Yojana (or) NPS Lite

1. Introduction 

1.1 The Government of India is extremely concerned about the old age income security of the working poor and is focused on encouraging and enabling them to join the National Pension System (NPS). To address the longevity risks among the workers in unorganised sector and to encourage the workers in unorganised sector to voluntarily save for their retirement, who constitute 88% of the total labour force of 47.29 crore as per the 66th Round of NSSO Survey of 2011-12, but do not have any formal pension provision, the Government had started the Swavalamban Scheme in 2010-11. However, coverage under Swavalamban Scheme is inadequate mainly due to lack of guaranteed pension benefits at the age of 60.

1.2 The Government announced the introduction of universal social security schemes in the Insurance and Pension sectors for all Indians, specially the poor and the under-privileged, in the Budget for the year 2015-16. Therefore, it has been announced that the Government will launch the Atal Pension Yojana (APY), which will provide a defined pension, depending on the contribution, and its period. The APY will be focussed on all citizens in the unorganised sector, who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA). Under the APY, the subscribers would receive the fixed minimum pension of Rs. 1000 per month, Rs. 2000 per month, Rs. 3000 per month, Rs. 4000 per month, Rs. 5000 per month, at the age of 60 years, depending on their contributions, which itself would be based on the age of joining the APY. The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by any subscriber under APY would be 20 years or more. The benefit of fixed minimum pension would be guaranteed by the Government. The APY would be introduced from 1st June, 2015.

2. Benefit of APY

2.1 Fixed pension for the subscribers ranging between Rs. 1000 to Rs. 5000, if he joins and contributes between the age of 18 years and 40 years. The contribution levels would vary and would be low if subscriber joins early and increase if he joins late.

3. Eligibility for APY 

3.1 Atal Pension Yojana (APY) is open to all bank account holders.

4. Age of joining and contribution period 
4.1 The minimum age of joining APY is 18 years and maximum age is 40 years. The age of exit and start of pension would be 60 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

5. Focus of APY 
5.1 Mainly targeted at unorganised sector workers.

6. Enrolment and Subscriber Payment 
6.1 All bank account holders under the eligible category may join APY with autodebit facility to accounts, leading to reduction in contribution collection charges. The subscribers should keep the required balance in their savings bank accounts on the stipulated due dates to avoid any late payment penalty. Due dates for monthly contribution payment is arrived based on the deposit of first contribution amount. In case of repeated defaults for specified period, the account is liable for foreclosure. Also any false declaration about his/her eligibility for benefits under this scheme for whatsoever reason, the entire government contribution shall be forfeited along with the penal interest. For enrolment, Aadhaar would be the primary KYC document for identification of beneficiaries, spouse and nominees to avoid pension rights and entitlement related disputes in the long-term. The subscribers are required to opt for a monthly pension from Rs. 1000 - Rs. 5000 and ensure payment of stipulated monthly contribution regularly. The subscribers can opt to decrease or increase pension amount during the course of accumulation phase, as per the available monthly pension amounts. However, the switching option shall be provided once in year during the month of April. Each subscriber will be provided with an acknowledgement slip after joining APY which would invariably record the guaranteed pension amount, due date of contribution payment, PRAN etc.

7. Enrolment agencies 

7.1 All Points of Presence (Service Providers) and Aggregators under Swavalamban Scheme would enrol subscribers through architecture of National Pension System. The banks, as POP or aggregators, may employ BCs/Existing non - banking aggregators, micro insurance agents, and mutual fund agents as enablers for operational activities. The banks may share the incentives received by them from PFRDA/Government, as deemed appropriate

8. Operational Framework of APY 

8.1 It is Government of India Scheme, which is administered by the Pension Fund Regulatory and Development Authority. The Institutional Architecture of NPS would be utilised to enrol subscribers under APY. The offer document of APY including the account opening form would be formulated by PFRDA.

9. Funding of APY 

9.1 Government would provide (i) fixed pension guarantee for the subscribers; (ii) would co-contribute 50% of the total contribution or Rs. 1000 per annum, whichever is lower, to eligible subscribers; and (iii) would also reimburse the promotional and development activities including incentive to the contribution collection agencies to encourage people to join the APY.

11. Penalty for default 5 

11.1 Under APY, the individual subscribers shall have an option to make the contribution on a monthly basis. Banks are required to collect additional amount for delayed payments, such amount will vary from minimum Rs. 1 per month to Rs 10/- per month as shown below:
• Rs. 1 per month for contribution upto Rs. 100 per month.
• Rs. 2 per month for contribution upto Rs. 101 to 500/- per month.
• Rs. 5 per month for contribution between Rs 501/- to 1000/- per month.
• Rs. 10 per month for contribution beyond Rs 1001/- per month.
The fixed amount of interest/penalty will remain as part of the pension corpus of the subscriber.
 11.2 Discontinuation of payments of contribution amount shall lead to following:
• After 6 months account will be frozen.
• After 12 months account will be deactivated.
• After 24 months account will be closed.

12. Operation of additional amount for delayed payments 

12.1 APY module will raise demand on the due date and continue to raise demand till the amount is recovered from the subscriber’s account. 12.2 The due date for recovery of monthly contribution may be treated as the first day /or any other day during the calendar month for each subscriber. Bank can recover amount any day till the last day of the month. It will imply that contribution are recovered as and when funds are available any point during the month. 12.3 Monthly contribution will be recovered on FIFO basis- earliest due instalment will recovered first along with the fixed amount of charges as mentioned above. 6 12.4 More than one monthly contribution can be recovered in month subject to availability of the funds. Monthly contribution will be recovered along with the monthly fixed due amount, if any. In all cases, the contribution is to be recovered along with the fixed charges. This will be banks’ internal process. The due amount will be recovered as and when funds are available in the account.

13. Investment of the contributions under APY 

13.1 The amount collected under APY are managed by Pension Funds appointed by PFRDA as per the investment pattern specified by the Government. The subscriber has no option to choose either the investment pattern or Pension Fund.

14. Continuous Information Alerts to Subscribers 

14.1 Periodical information to the subscribers regarding balance in the account, contribution credits etc. will be intimated to APY subscribers by way of SMS alerts. The subscribers will have the option to change the non – financial details like nominee’s name, address, phone number etc whenever required. 14.2 All subscribers under APY remain connected on their mobile so that timely SMS alerts can be provided to them at the time of making their subscription, autodebit of their accounts and the balance in their accounts.

15. Exit and pension payment 

15.1 Upon completion of 60 years, the subscribers will submit the request to the associated bank for drawing the guaranteed monthly pension. 15.2 Exit before 60 years of age is not permitted, however, it is permitted only in exceptional circumstances, i.e., in the event of the death of beneficiary or terminal disease.

16. Age of Joining, Contribution Levels, Fixed Monthly Pension and Return of Corpus to the nominee of subscribers

16.1 The Table of contribution levels, fixed minimum monthly pension to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period is given below. For example, to get a fixed monthly pension between Rs. 1,000 per month and Rs. 5,000 per month, the subscriber has to contribute on monthly basis between Rs. 42 and Rs. 210, if he joins at the age of 18 years. For the same fixed pension levels, the contribution would range between Rs. 291 and Rs. 1,454, if the subscriber joins at the age of 40 years.

References:

https://npscra.nsdl.co.in/scheme-details.php

How to check balance of APY:

1. Visit https://www.npscra.nsdl.co.in/scheme-details.php 
2. Click on APY e-PRAN/Transaction Statement View. The website will redirect you to another page. 

3. Choose 'With PRAN' or 'Without PRAN'. 

4. If you have chosen the 'With PRAN' option, you will be required to enter your PRAN and bank account number. In case you don't have PRAN, you will have to enter - subscriber's name, bank account number, and date of birth. 

5. Choose: APY e-PRAN View or Statement of Transaction View. 

6. Enter Captcha code and click on submit. 

APY e-PRAN will give you details of your APY e-card along with information such as pension start date, pension amount you have opted for, APY service provider etc. 

The transaction statement can help you check the contributions made by you either monthly, quarterly or half-yearly basis. You will get details regarding total contributions made to the scheme till date. 

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Sukanya Samriddi Yojna (For Bright Future of your Daughter)

Sailent Features:

• SSY Account can be opened for Girl Child upto 10 years of age.
• Deposit for only 15 years with maturity at 21 Years
• Facility of 50% payment after 18 years of age for higher education.
• Facility of account closure on marriage after the age of 18 Years.
• Deposit minimum of 1000/- and Maximum of 150,000/- per year.
• Highest interest rate among all of other small saving schemes.
• Income tax benefit under section 80C
• Triple excempt benefits ( No tax on amount invested or earned as interest or withdrawn amount)

SUKANYA SAMRIDDHI ACCOUNT

SUKANYA SAMRIDDHI ACCOUNT : FACILITY AVAILABLE AT ALL OUR BRANCHES

Sukanya Samriddhi Accounthas has been introduced vide Government of India Notification No. G.S.R.863(E) dated December 02, 2014 and circulated to Banks by Reserve Bank of India vide their letter No.RBI/2014-15/494/IDMD(DGBA).CDD/No.4052/15.02.006/2014-15 dated 11th March 2015. Facility to open accounts under the scheme is now available at all SBI branches.

Objective: To promote the welfare of Girl Child

Who can open the account: A natural/ legal guardian on behalf of a girl child

Maximum number of accounts: Upto two girl children or three in case of twin girls as second birth or the first birth itself results in three girl children

Minimum and Maximum Amount of Deposit: Min.1000 of initial deposit with multiple of one hundred rupees thereafter with annual ceiling of Rs.150000 in a financial year

Tenure of the Deposit: 21 years from the date of opening of the account

Maximum period upto which deposits can be made: 15 years from the date of opening of the account.

Interest on Deposit: As notified by the GOI, compounded annually with option for monthly interest pay-outs to be calculated on balance in completed thousands.( Current rate 8.60%w.e.f 1st April, 2016)

Tax Rebate: As applicable under section 80C of the IT Act, 1961. In the latest Finance Bill, the scheme has been extended Triple exempt benefits i.e. there will be no tax on the amount invested, amount earned as interest and amount withdrawn.

Premature Closure: Allowed in the event of death of the depositor or in cases of extreme compassionate grounds such as medical support in life threatening diseases to be authorized by an order by the Central Government

Irregular Payment/ Revival of account: : By payment of penalty of Rs.50 per year alongwith the minimum specified amount per year

Mode of Deposit: Cash/Cheque/ Demand Draft/ Transfer/ online transfers through internet Banking .

SIP : Standing Instructions can be given either at the Branch or set through Internet Banking for automatic credit to Sukanya Samriddhi Account .

Withdrawal : 50% of the balance lying in the account as at the end of previous financial year for the purpose of higher education, marriage after attaining the age of 18 years.

NOTE: As this is a Govt. of India scheme, customers are advised to visit www.nsiindia.gov.in for latest instructions/ modification in the scheme.

Reference:
https://www.sbi.co.in/portal/web/govt-banking/sukanya-samriddhi-yojana

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What is NPS and how to contribute

National Pension Scheme (NPS)

Overview

National Pension Scheme (NPS) is a voluntary, defined contribution retirement savings scheme. The NPS has been designed to enable systematic savings during the subscriber's working life.. It is an attempt towards finding a sustainable solution to provide adequate retirement income to every citizen of India.

How NPS Works?

• Under the NPS, an individual's savings is pooled in a pension fund.
• These funds are invested by Pension Fund Regulatory and Development Authority (PFRDA) regulated professional fund managers as per the approved investment guidelines in the diversified portfolios comprising of government bonds, bills, corporate debentures and shares.
• These contributions would grow and accumulate over the years, depending on the returns earned on the investment made.

At the time of a normal exit from NPS, the subscribers may use the accumulated pension wealth under the scheme either to purchase a life annuity from a PFRDA empanelled life insurance company or withdraw a part of the accumulated pension wealth as lump-sum, if they choose to do so.

ICICI Bank has been appointed by PFRDA to act as one of the Point of Presence (POP) for the NPS. Presently, we have designated branches to carry out the NPS activities as Point of Presence- Service Providers (POP-SP).

Eligibility

All citizens age from 18 years to 65 years of age.

Additional tax benefit

As per the amendment made by Union Budget 2015 in tax provisions for FY 2015-16, if any customer contributes voluntarily towards the NPS scheme, then he would get an additional benefit of ₹ 50,000 under section 80CCD (1B) which would be over and above the ceiling limit of ₹ 1,50,000 as prescribed under section 80 CCE.

National Pension system is a very good scheme introduced by Central Government, it is introduced in 2004 and starting 2009 every citizen is allowed to apply or open NPS account. We need to tie up with annuity service provider like LIC, HDFC Life , ICICI etc.
Video by NSDL team on NPS plan and its 4 options:

Online contributions to NPS account, how to do it?

How to open NPS account online?

References:
https://www.youtube.com/watch?v=n7r3a3rZDA0

https://www.icicibank.com/Personal-Banking/account-deposit/pension-schemes/national-pension-system/index.page?

https://www.icicibank.com/Personal-Banking/faq/account-and-deposit/new-pension-system-faqs.page

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