Best pension plans in India – Disadvantages and Advantages

Creating a retirement portfolio

Apart from the pension schemes that were available for the government employees, there was nothing as such in general for the public at large. In India, there is a separate regulator for the pension plans which controls the rules and terms related with the pension environment. There are different vehicles through which the pension funds come up and that is:

• EPF or Employee Provident Fund

• PPF or Pension Provident Fund

Pension fund environment in India

Let’s have a look at the pension environment fund and the Best pension plans in India which are encompassed by some basic elements which boost the economy on a significant scale. There are segments through which the pension regulatory fund in India works up. Government provides financial assistance to the people who are above 65 years of age. Individual account pension funds involve the contribution by the people as per their convenience.

The Pensions plans in India also come under the PPF which is managed by the government and 75% of this fund is given as loan to the state government. There are many pension schemes which are proposed by the government but will take a time frame to get executed to reality.

Pensions plans available currently

Broadly the Pensions plans in India are divided under the following categories which are as follows:

• Unit Linked Investment Plans or ULIPS

• NPS or National Pension Schemes

• Mutual Funds Retirement Plans

• Creating a pension plan portfolio

• Traditional retirement plans

Along with these plans there are attached to them several advantages and disadvantages and having an insight in to each of them makes it easier for you to pick the right one. Talking about the broader categories there are two divides which are as follows:

Immediate annuity plans are generally considered to be the Best pension plans in India in which you get the allowance from the time you start paying lump sum amount. This is primarily for the people who have huge amount of money that makes it easier from them to invest in such a vehicle and get the payment on regular basis. There are some of the companies which are providing these plans in India such as ICICI, HDFC and SBI.

Deferred annuity plans in which you have to pay the premiums for fixed number of years and then onward after your retirement you start to get the pension income. There are large numbers of insurance players in India who are providing these services. But while taking a more logical purview, you should know the facets attached with it in terms of advantages and disadvantages.

Why the deferred annuity plans may not be that suitable for you?

There are some points of concern that you should consider before investing in any annuity plan:

You have to be concerned about how much you will be charged on the money that you are investing in the plan. It often happens that the companies charge heavily on the ULIP plans but avoid giving a clear picture to the policy buyers. This may prove to be quite costly for you so make sure that you have knowledge of the terms and conditions involved in the plans.

You may invest in better ways: This proves to be quite fruitful for you as it is a better idea to gain promising returns from the equity investment. Though there are Best pension plans in India but when it comes to the deferred pension plans, the money gets struck in the policy and you get the return after many years which make not be as positive considering the present economic scenario.

So before you invest in the pension plans, do consider the aspects which are necessarily to consider.

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