Monthly Pension Scheme for Senior Citizens

Retirement planning is paramount to creating a constant source of income for life. For senior citizens, monthly pension plans can help finance daily needs be it your regular expenses, pursuing interests, a comfortable lifestyle, etc. There are several monthly pension schemes available for senior citizens that are effective and offer guaranteed income.

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Types of Monthly Pension Schemes for Senior Citizens

The choice of a pension scheme depends on your savings, your requirements, and risk tolerance, among other factors. For individuals who are averse to risk, you can look at government schemes that offer a monthly sum once you hit your retirement age. There are also traditional annuity schemes that come with insurance protection. 

Those who are willing to take some risks to grow their savings can explore retirement ULIPs that offer a life cover along with market-linked investment. These plans come with monthly annuity options that go on till the death of the policyholder.  

Monthly Pension Schemes for Senior Citizens by the Government of India

  1. National Pension Scheme

    A senior citizen in the age bracket of 60 to 65 years can now open an account with NPS. The tenure of the policy can continue till they turn 70 years of age. This gives investors 5 to 10 years to invest and benefit from the returns of market linked instruments such as equities, Corporate Bonds, Government Bonds, etc. 

    Once the account matures, the policyholder can withdraw 60% of the accumulated funds. It is, however, mandatory to invest a minimum of 40% of the income to purchase an annuity plan. This is to ensure a source of monthly income for senior citizens for the entirety of their lives.  

    The NPS is considered one of the most effective tax-savings instruments. You can save up to Rs. 1.5 lakhs in taxes under section 80C and up to Rs. 50,000 under section 80CCD (1B) of Income Tax Act of India. 

  2. Pradhan Mantri Vaya Vandana Yojana

    Any person aged 60 or above can purchase this pension scheme to secure a monthly income for life. This monthly pension scheme for senior citizens comes with a fixed policy term of 10 years. 

    For a monthly pension, the minimum amount that you would have to invest is Rs. 1.62 Lakhs. The maximum purchase price is capped at Rs. 15 Lakhs. Investment can be done monthly, quarterly, half-yearly, or yearly. The corresponding minimum and maximum amount of pension that you would be entitled to every month is Rs. 1000 and Rs. 9250, respectively. 

    A key benefit of the policy is that the policyholder also enjoys life coverage throughout the entire duration of the policy term. The nominees shall be offered the purchase price in full in the event of the pensioner’s death.  

  3. Indira Gandhi National Old Age Pension Scheme (IGNOAPS)

    This is a monthly pension schemes for senior citizens belonging to the low-income population of the country. Anyone aged 60 and above and falling in the BPL category can benefit from the monthly payout made by the Central Government to the beneficiaries. The pension amount can range between Rs. 300 to Rs. 500. 

Traditional Annuity Schemes for Senior Citizens

  1. ABSLI Guaranteed Annuity Plus

    It offers a guaranteed income for as long as you or your spouse is alive. It comes with 10 payout options that you can choose per your needs. For instance, you can choose to receive a fixed monthly income for life, or have the sum increase at 3-5% after a period of time. It is a single premium policy, meaning that you would have to pay a lump sum at the time of policy purchase. The minimum amount has been fixed at Rs. 1.5 Lakhs.  

  2. HDFC Life Pension Guaranteed Plan

    The maximum entry age is fixed at 85 years for a senior citizen. A single premium payment in this plan will guarantee you a monthly income for life. You can choose either a deferred annuity option or an immediate annuity option. Further, you can purchase this policy for your wife. This ensures that even on your death, the income benefit continues till the time she lives. 

  3. ICICI Pru Guaranteed Pension Plan

    This is a monthly pension scheme for senior citizens who are looking for insurance protection along with pension benefit after retirement. With a choice of over 10 annuity options, the ICICI Pru Guaranteed Pension Plan also lets you increase your monthly income through its top-up facility. If you choose the immediate annuity option, you will start receiving a monthly income immediately following purchase. Under the deferred annuity option, you can choose to receive the payouts after a certain period of time. Under both cases, the pension amount continues till the time you live. 

  4. Max Life Forever Young Pension Plan

    This is a unit linked pension plan meaning that the money you invest in this plan will go towards market-linked funds such as equity and debt funds. The returns you earn will be dependent on the market performances of these funds. As such, the risk of investment is higher that all the other options discussed. The fund options available to you are - 

    • Pension Maximiser Option - It is a hybrid fund that invests in both debt instruments and equities. The risk profile is moderate. 

    • Pension Preserver Option - It is a hybrid fund that invests a majority in debt instruments. The risk profile is low. 

    A senior citizen in the age bracket of 60-65 years can buy this plan.  The plan comes with annuity benefits and safeguards the future of your spouse financially in the event of your death within the coverage period.

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