Why NPS Tops Traditional Retirement Plans
The National Pension Scheme in India is redefining retirement planning. Compared to traditional options like the Employee Provident Fund (EPF) and Public Provident Fund (PPF), it stands out. So, what makes it better? Let’s compare.
More Control with Investment Options:
The NPS offers flexibility that EPF and PPF lack. EPF ties funds to a fixed rate, and PPF sticks to a government-set return (7.1% in 2023 per RBI). However, the National Pension Scheme lets you pick equity, bonds, or debt. This can boost returns—equity funds averaged 12-14% over a decade, topping PPF’s steady gains.
Superior Tax Advantages:
Tax-wise, the National Pension Scheme excels. Like EPF and PPF, it offers ₹1.5 lakh under Section 80C. But it adds ₹50,000 more under Section 80CCD(1B). Plus, 60% of your maturity amount is tax-free, unlike EPF’s taxable post-retirement interest. For example, this edge helps salaried Indians save more. Check out “When a business needs money for day-to-day operations or expansion” on Artho Shots. However, with the new income tax regime kicks in the tax advantage for the individual is not available under 80C.
Balancing Returns and Access:
EPF and PPF prioritize safety over growth, with long lock-ins—15 years for PPF. In contrast, the National Pension Scheme blends growth and access. At 60, you withdraw 60% as a lump sum and use 40% for an annuity. IBEF notes its assets hit ₹10 lakh crore in 2023. Visit the RBI website for details.
Which Wins for Your Future?
The National Pension Scheme suits those chasing higher returns and control. EPF fits salaried stability, while PPF appeals to cautious savers. Your pick depends on your goals. In addition, it’s a powerful tool for India’s retirees. Curious? Explore more National Pension Scheme benefits now!