Retirement planning is one of the basic investment objectives for individuals as, after a certain age, the earning potential falls drastically and post-retirement, the regular income stream is get stopped. There have been a couple of investment options through which a retirement corpus can be built or a minimum pension can be guaranteed. In order to extend pension benefits to the working poor from the unorganised sector, the government has been running the Atal Pension Yojana (APY) since May 2015.
Here are the things one should keep in mind before opting for the APY scheme:
1. Eligibility
The Atal Pension Yojana allows Indian citizens between 18 years and 40 years of age to opt for fixed pension slabs of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000 and Rs 5,000. An applicant gets to choose the preferred slab at the time of subcription.
2. Contribution period
The minimum age of opting for Atal Pension Yojana is 18 years and the maximum age is 40 years. The age of exit and start of pension is 60 years. This means that the minimum period of contribution for a beneficiary of the scheme is 20 years, and the maximum is 42 years. Exit and payment of pension is not allowed, except in situations like death of the beneficiary or terminal disease.
3. Montly contribution
One can contribute a minimum of Rs 42 and a maximum of Rs 1,454 which is subject to the pension requirement from Rs 1,000 to Rs 5,000 and the age of entry into Atal Pension Yojana. An individual can join Atal Pension Yojana by investing Rs 42 per month from the age of 18 years up until the age of 60 years to get a minimum guaranteed pension income of Rs 1,000 per month, however, to receive a pension of Rs 5,000, an individual is required to invest Rs 210 per month beginning at the age of 18 years.
4. Withdrwal
The withdrawal from Atal Pension Yojana is allowed after the attaining an age of 60 years. n case of death of the subscriber due to any cause, the pension amount would be available to the spouse and in case of death of both subscriber and spouse, the pension amount would be returned to the eligible nominee. The premature withdrawal is only allowed only in exceptional circumstances such as in the event of the death of the beneficiary or terminal disease.
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