Pension plans provide financial security and stability during old age when people don’t have a regular source of income. A retirement plan ensures that people live with pride and without compromising their standard of living during advancing years. A pension scheme allows one to invest and accumulate savings and get a lump sum amount as regular income through an annuity plan on retirement.
According to United Nations Population Division, World’s life expectancy is expected to reach 75 years by 2050 from the present level of 65 years. The better health and sanitation conditions in India have increased the life span. As a result, the number of post-retirement years increases. Thus, the rising cost of living, inflation, and life expectancy make retirement planning essential to today’s life. The Government of India has started the National Pension System to provide social security to more citizens.
What are the Different Types of Pension Schemes?
A pension scheme is a retirement savings plan that provides a regular income stream through periodic payments during the retiree’s life.