The best pension plan in India for 2022 depends upon a number of factors. To begin with, it depends on your risk appetite, the amount of money you have for investment, and the type of pension plan and features you require.
Before discussing specific pension plans, it is important to understand the two main types of pension plans in India – Traditional pension benefits and the New Pension System (NPS).
Traditional pension plans such as annuities, life insurance pension plans, govt. pension schemes, etc., offer guaranteed benefits in the form of a predetermined fixed amount or percentage of the pension corpus. These plans are considered suitable for people with a low risk appetite who do not wish to take the risk of market-linked investing.
The NPS, on the other hand, is a market-linked pension plan, which invests pension contributions in a mix of equity and debt instruments and the returns are linked to the performance of the markets. It is suitable for people with a long-term horizon and a moderate to high risk appetite.
Given these two options, the best pension plan for 2022 would depend on a number of factors mentioned above. Some of the popular pension plans available in India for 2022 include:
Annuity plans: These are traditional pension plans offered by life insurance companies which provide a fixed or variable income for life. Popular annuity plans in India include HDFC Life Immediate Annuity Plus, LIC New Jeevan Nidhi and SBI Life-Deferred Annuity Plan.
NPS: The NPS is an EET (Exempt-Exempt-Taxable) instrument which helps you build a corpus over the long-term and then allows you to withdraw a part of it as tax-free lump sum amount at the age of 60. This plan is suitable for people willing to take the risk of market-linked investing.
Company offered pension plans: Many companies offer pension plans to their employees which can be taken advantage of. These plans usually provide tax benefits and asset allocation according to the risk profile of each investor.
Mutual Fund Pension Plans: Mutual funds offer their own pension plans, which invest the money in balanced fund or equity funds. These plans are market-linked and offer long-term capital appreciation.
Ultimately, the best pension plan for you would depend on the specific features of the plan, your risk appetite, and the other factors mentioned above. You should also consider consulting a qualified financial planner or investment advisor in order to select the best plan for your needs.