People generally believe that if you want to save for retirement, then you should invest in any such scheme or product, which is only for this purpose. You can also save in other ways and later it can be used in planning for retirement. Also, due to the presence of products like the Employees Provident Fund (EPF) and National Pension System (NPS), people prefer such schemes for retirement plans. At the same time, these products are specially designed to cater to the needs of retirement. Investing in these products also gives the benefit of tax exemption. Hence these are also called tax saving. Overall, a big greed to save for retirement is also to reduce tax liability. But it is not that if you deposit money in a bank or a mutual fund, then it cannot be used for post-retirement needs.
Also, like any other savings, retirement savings should also be assessed on the basis of security, liquidity, returns and tax savings. There is another major problem with traditional or old thinking about retirement savings. This problem is associated with not understanding the risk properly or at all. Some people are fortunate to have such a source of income that increases income as inflation increases. Such as property. At the same time, they get good returns. The rest of the people who do not own property need to make extra efforts to deal with the impact of inflation throughout their life. The greatest risk in investment is attributed to short-term fluctuations. On the other hand, NPS works as a compulsory pension system as well as voluntary pension system. Central and state governments are using the compulsory pension system for their employees.
At the moment, it is a matter of regret that the voluntary scheme of NPS has not been able to gain much popularity among the people. Along with this many people wishing to save email me. At the same time, from the information I get, one thing is clear that those who advise people on personal finance and who sell products for investment are not advising to adopt NPS to meet the retirement needs. Apart from this, one of the advantages of investing in NPS is that there is a tax rebate on investments up to Rs 50,000. Currently, this exemption is not available in any other type of investment. At the same time, there are very few people after tax savings, who consider NPS as a good option for investment. Apart from this, one of the reasons for the low selling of this product is that special efforts are not being made to sell NPS. At the same time, those who know about the benefits of NPS are using it with enthusiasm.
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