National Pension System (NPS) Plan your retirement with NPS

Size: px

Start display at page:

Download "National Pension System (NPS) Plan your retirement with NPS"

Bertram Matthews
5 years ago
Views:

1 National Pension System (NPS) Plan your retirement with NPS

2 As a tool for retirement planning, National Pension System (NPS) is getting a lot of attention from investors. Like most of the investors, you may also have the following queries: What is National Pension System(NPS)? Why should you invest in NPS? How can I create pension wealth through NPS? How to invest in NPS through ICICIdirect.com?

3 What is NPS? NPS-National Pension System is a voluntary contributory pension scheme introduced by Central Government. It helps you accumulate a pension corpus during your work life for a peaceful retired life. Types of NPS Accounts: NPS Tier 1 (mandatory) account - Income Tax benefits as per IT Act, Option to invest anytime during the year as per your convenience - Normal withdrawal on attaining age of 60 yrs - Partial withdrawal allowed after period of 10 yrs of NPS investment under certain conditions NPS Tier 2 (optional) account - No restriction on withdrawal - Option to invest anytime during the year as per your convenience

4 What is NPS? Investment Choice Choice of 7 Pension Fund Managers - HDFC Pension - ICICI Prudential - Kotak Pension Fund - SBI Pension fund - UTI - Reliance Pension fund - LIC Choice of Approach - Active Choice (Active Fund Management by subscriber) - Auto Choice (Default Scheme with Life-cycle Fund option) Choice of 3 Schemes - Asset Class E : Equity (maximum allocation is 50% of investment) - Asset Class C : Corporate Bonds/Fixed Income - Asset Class G : Government Securities Choice of 7 Annuity Service Providers - ICICI Prudential Life Insurance - HDFC Life - SBI Life Insurance - Reliance Life insurance - LIC - Bajaj Allianz - Star Union Dai-ichi

subscribers* Accumulated wealth Click on

5 Why should you invest in NPS? Tax Benefits Diversification Diversification Professional Management Professional Management Benefits High Returns Low Cost Nearly 1 Cr NPS subscribers* Accumulated wealth Click on respective benefit to view more details *As on May 31, 2016 Source : NPS trust website

Why should you invest in NPS? Save tax up to 61,800 * Basic Salary in lac ( ) 2 5 10 15 10% of basic salary in lac ( ) up to maximum of 1.

6 Why should you invest in NPS? Save tax up to 61,800 * Basic Salary in lac ( ) % of basic salary in lac ( ) up to maximum of 1.5 L is tax exempt under Section 80 C Additional 50,000 investment in lac ( )-tax exempt under Section 80CCD (1B) Investment in NPS in lac ( ) (Tax-exempt) Tax saved 7,210^ 30,900* 46,350* 61,800* ^Calculated at the lowest tax slab rate applicable * Calculated at the highest tax slab rate applicable - Investment in NPS can help you save up to 2,00,000 from being taxed

7 Values in lacs Why should you invest in NPS? Comparative returns makes NPS a preferred investment option over EPF & PPF Expected returns in NPS : 12% Expected returns in EPF : 8.8% Expected returns in PPF : 8.1% Investing Rs every month in NPS can help you generate wealth of Rs Cr NPS EPF PPF yrs 15yrs 20yrs 25yrs 30yrs

Values in lacs How can I create pension wealth through NPS? Create wealth in long term by investing in a mix of equity & debt Let say you had invested Rs. 3 Lac in NPS with Rs.

8 Values in lacs How can I create pension wealth through NPS? Create wealth in long term by investing in a mix of equity & debt Let say you had invested Rs. 3 Lac in NPS with Rs. 1 Lac in each asset class i.e. Equity, Corporate Bonds, & Government Securities. Investment in various asset classes Equity Corporate bonds Government Securities Asset class - Equity has given higher returns year 2 year As on June 30, 2016 * Returns of HDFC pension fund manager as on June 30, 2016 Click here to view scheme-wise updated returns on monthly basis of all the pension fund managers

Values in lacs How can I create pension wealth through NPS? Early starters benefit from power of compounding i.e. longer you stay invested, higher would be your accumulated wealth.

9 Values in lacs How can I create pension wealth through NPS? Early starters benefit from power of compounding i.e. longer you stay invested, higher would be your accumulated wealth. Pension wealth illustration Pension wealth on attainment of 60 yrs of age * Total investment ( ) Total Pension wealth ( ) 0 28 years 40 years Age * Assuming annualized returns of 12% Click here to compute pension wealth

10 How to invest through ICICIdirect.com? 1 2 Next step is to click on Subscribe NPS & follow 4 step process for online registration 4 3

11 Thank You

Demystifying NPS For You

Demystifying NPS For You FAQs What is NPS? The acronym NPS stands for National Pension System this is a pension system operated by the Government of India. What was the rationale behind the implementation