Elderlies are a crucial part of our society. They have worked hard for years and contributed to the economic and social development of our country in many ways. Therefore, the government of India considers caring for the elderly as a key elemental role of the society and the governing bodies. Through various constitutional laws, acts and pension schemes, the Indian government ensures that this important section of the society is not neglected and live a quality life after their retirement. Over the years, various ruling governments have launched a number of social security and senior citizen pension schemes.
Meanwhile, the statistics and surveys indicate that the elderly in India is growing rapidly in numbers. By 2050, this segment of society will constitute 20% of the population, which is equivalent to the total population of some of the western countries like the USA. Therefore, there is an urgent need for the government to take initiatives that will overcome the challenges of old age. And when the time comes, the senior citizens are prepared for the future.
Consider a list of senior citizens pension schemes in India
National Pension Scheme
National Pension Scheme or System is the safest senior citizen pension and an investment plan introduced by the Government of India that ensures social security to the retired persons of the country. It allows the investor long-term saving and market-based return that is completely secure. Under the purview of the Pension Fund Regulatory and Development Authority (PFRDA), this is one of the best pension plans in India.
As compared to other pension plans, this one is cost-effective and it allows tax benefits, all at attractive market-based returns. At the same time, it is extremely secure because it is regulated by government statutory body PFRDA that was constituted through a parliamentary act in 2003. Anyone who is the citizen of India, a resident or a non-resident, belonging to the age group 18-65 years is eligible to avail this scheme and open an NPS account. This is among the many best pension plans in India.
Indira Gandhi National Old Age Pension Scheme (IGNOAPS):
Under National Social Assistance Scheme by Government of India, IGNOAPS is an old-age pension scheme for Indians above 60 years age and are living below the poverty line. The beneficiaries receive a monthly pension by central and state government both. Through this scheme, the government of India aims to provide a decent level of assistance to the elderlies who are not self-reliant and are not financially sound.
Pradhan Mantri Vaya Vandana Yojna (PMVVY):
This is one of the most recent additions to the list of senior citizen pension schemes in India. It is exclusively designed for the benefit of senior citizens of India or anyone above the age of 60. The scheme was first introduced in May 2017 and it was renewed till 31st March 2020. As per the scheme, the beneficiary can avail assured return at 8% per annum. This is payable monthly for the period of 10 years. In addition, the pension is flexible for the beneficiary to choose the period they want to make the claim for. The frequency can vary from monthly to yearly. The best part is that it is exempted from GST or Service Tax. A Beneficiary can also avail a loan up to 75% of purchase price, only after completing three years of owning the policy. More benefits include premature exit with 98% purchase price for the purpose of treatment of critical sickness of self or spouse. The investment limit is restricted to no more than Rs. 15 lakh per person. This pension scheme in India is being implemented by LIC and can be availed as one of the many safe and secure LIC senior citizen pension schemes.
Varishtha Pension Bima Yojana:
Introduced by NDA government, Varishtha Pension Bima Yojana aims to safeguard and protect the interest of senior citizens after demonetization when there was a slump in interest rates of fixed deposits. The scheme promises guaranteed 8% interest rate for 10 years. Implemented by LIC, it is known as yet another LIC senior citizen pension scheme. The subscriber can opt for returns monthly, quarterly, half-yearly or annually. The pensioner can also claim tax benefit under section 80CCC of Income Tax Act and it can be combined with other pension schemes too.
Pradhan Mantri Atal Pension Yojana:
This scheme was previously known as Swavalamban Yojana introduced by Government of India for citizens belonging to the unorganized sector and rural sector. The eligibility criteria are 18 – 40 years, with the sole purpose of increasing the number of members under the National Pension Scheme. This is a social security scheme through which the government plans to contribute to the citizens’ earnings after they reach the age of 60 years, the age when the pension begins under this scheme.
Senior Citizens Savings Scheme from RBI:
This is the most popular and beneficial senior citizen pension scheme and saving scheme in India. It is a source of secure and risk-free investment for the retirees. It is a long-term saving scheme that can be availed by any certified banks and post offices in India. Anyone above 60 years of age can invest in this plan with a maximum deposit of 15 lakhs in the SCSS account. This scheme offers the highest rate of interest, 8.6%, which is far greater than the interest on savings or FD account. Also, it is eligible for tax exemption under the section 80C and provides nomination facility.
Post Office Monthly Income Scheme:
Under the purview of the finance ministry, this is the best pension plan in India for senior citizens. It is highly reliable and can earn several benefits. While NRIs are excluded from the scheme, it can be opened in the name of a minor, who is above the age of 10. Under the scheme, an individual can invest up to 4.5 lakhs and joint members can deposit up to 9 lakhs. The interest is automatically credited to the account via ECS system.
Besides these senior citizen pension schemes and plans, it is suggested that citizens must invest in other saving plans that provide guaranteed returns for their safe and better old-age. Fixed deposits, health insurance, and tax-free bonds offer additional senior citizen benefits. For example, most of the banks offer a higher rate of interest on FDs to senior citizens as compared to the regular beneficiaries. On health insurance, senior citizens can avail exemption up to 50,000. These are a few safe investment plans for senior citizens that are highly recommended for a carefree future. These plans aim to reduce the financial burden and provide assistance in living a quality life.