Simplified Laws Guide to Taxation and Legal Concern
This is where I left the NPS article yesterday. The return on pension fund is not great. The return may be even lesser than the return on a bank fixed deposit. If that is the case, why one has to invest in Pension fund? Is the pension fund a selling product for service providers? Here is the answer.
In my professional life, I have come across many aged people narrating their part of the story.
“I am really in trouble now. As you know, I retired from a private company last year. I have accumulated Rs.50 lakhs as my retirement fund. The money is lying in Fixed Deposit of Canara Bank. Now the trouble is that my son wants that money for setting up his business”
In another case, the daughter in law says “Uncle, if you don’t mind, your money will be of great help to us. We can buy another flat/plot. Anyway, you are living with us and all the expenses are met by us. So I don’t think there is a need of such huge savings in your account”
“Dad is going crazy. Can’t he help his grandson to get masters degree at Boston? He is anyway old; will he take the deposits with him? Once my son gets the job, he can even repay his loan”
The reasons are different, but the end result is the same. The hard earned money of the old man, his savings over the last 3-4 decades is to be withdrawn and given to the family (son, daughter or so).
As I have seen, many old people will succumb to the pressure of the family. Many of them have told me that “I couldn’t say No to my son, but heart to heart I wanted to retain my deposit to have an independent living” and they continue to say “Now you see for everything I have to depend on them and it is difficult for me to ask money from them”
Should I explain why a product like NPS or pension fund is required? Probably you got the answer.
If one has retirement funds which can’t be withdrawn by him or by his family members, he will continue to get monthly pension till his death. The corpus will go the legal heirs after the death. (Please also note that one should allocate resources for emergency fund).This way, the old man cannot succumb to the pressure of family members.
To lead an independent and respectful retirement life, one can plan for pension scheme. Don’t always look at only the rate of return as a yardstick for investments. Today’s youth is tomorrow’s senior citizens. Hello Youngistaan – plan for tomorrow.
Thought for the day
Old age is like everything else. To make a success of it, you have got to start young.
[…] Retirement age is the age at which a person is expected to stop work; withdraw the provident fund and other retirement benefits. The government employees and PF contributors will start getting pension. […]