All you need to know about Atal Pension Yojana

Worrying does not empty tomorrow of its troubles, it empties today of its strength

— Corrie Ten Boom

As humans the biggest worry we have is regarding our future and what is going to happen with us. But it doesn’t do much good to live in anxiety. Rather than speculating on what might be, it would be wise to take action to shield yourself from any rocky roads ahead. A pension is an account that allows you to save up for your retirement. Pension schemes are like an ice pack; stored in your refrigerator to use in case of a headache or so. Similarly, the pension you save can be withdrawn in case of an emergency, or it can be taken after retirement to serve your needs.

A few years back I remember watching the news on the Annual Budget speech given by the Finance Minister Arun Jaitley. The highlight of that year’s speech was the new pension scheme called “Swavalamban Yojana”, known today as Atal Pension Yojana. What’s special about this scheme launched by Prime Minister Modi on May 2015, is to have a pension scheme for the unorganised sector in India. The grey economy seems to grow bigger and bigger each year in India. This scheme makes sure that this sector realizes the importance of pension and increases the percentage of Indians opting the same.

Who can opt for APY?

This scheme is applicable to everyone in the unorganised sector who have joined the National Pension System administered in 2013. The minimum age to join this scheme is 18 years and the maximum goes up to 40 years. The individual should keep the account active for a minimum of 20 years. The Know Your Customer (KYC) process begins with the Aadhaar ID number for identifying beneficiaries, spouses and nominees to avoid the disputes related to entitlement in the future.

Why invest early in APY?

Suppose an individual joins a monthly pension of Rs.1,000 at the age of 18, he would be required to contribute Rs.42 per month. But if he joins this scheme at the age of 40, he has to contribute Rs.291 per month. Similarly, if a person were to join a monthly pension of Rs.5,000 at the age of 18, he would have to contribute Rs.210 per month. But if he joins the scheme at the age of 40, he has to contribute Rs.1,454 per month. So needless to say, the earlier you subscribe to this scheme, the better it is.

Investment and Returns from APY

The following tables show the returns one would earn, depending on when and how much one invests in APY

How to get minimum guaranteed pension of Rs. 1000/month from APY?

Atal Pension Yojana

Suppose you require a guaranteed pension of Rs. 1000 every month, the amount of contributions you need to make based on instalment options (monthly/quarterly/half-yearly) is shown in the table below:

How to get minimum guaranteed pension of Rs. 2000/month from APY?

Suppose you require a guaranteed pension of Rs. 2000 every month, the amount of contributions you need to make based on instalment options (monthly/quarterly/half-yearly) is shown in the table below:

Atal Pension Yojana

 

How to get minimum guaranteed pension of Rs. 3000/month from APY?

Suppose you require a guaranteed pension of Rs. 3000 every month, the amount of contributions you need to make based on instalment options (monthly/quarterly/half-yearly) is shown in the table below:

 

Atal Pension Yojana

How to get minimum guaranteed pension of Rs. 4000/month from APY?

Suppose you require a guaranteed pension of Rs. 4000 every month, the amount of contributions you need to make based on instalment options (monthly/quarterly/half-yearly) is shown in the table below:

Atal Pension Yojana

How to get minimum guaranteed pension of Rs. 5000/month from APY?

Suppose you require a guaranteed pension of Rs. 5000 every month, the amount of contributions you need to make based on instalment options (monthly/quarterly/half-yearly) is shown in the table below:

Atal Pension Yojana

What are the benefits of APY?

The benefit of the minimum pension paid by you would be ensured by the Government. When higher investment returns are received on your contributions, you get paid higher pension.

How much tax can one save with APY?

The other benefits include the tax deduction upto Rs. 50,000 under Section 80CCD(1) for all your contributions.

In case of your untimely death, your pension will become available to your spouse or to the person you have nominated. This ice pack will come in handy any day. So don’t spend your days worrying about the future, get yourself an APY account and start saving now.

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