Atal Pension Scheme: Make your life secure after retirement
Today, everyone wants to secure their future. But for crores of people in India who work in the unorganized sector – such as farmers, laborers, domestic workers and small shopkeepers – financial security after retirement is a big challenge. Understanding this challenge, the Government of India launched the Atal Pension Scheme. This is a social security scheme whose aim is to provide a fixed pension in old age to those people who do not have any other pension facility available.
What is Atal Pension Scheme?
Atal Pension Scheme (APY) is a government-backed pension scheme specially designed for workers in the unorganized sector. Indian citizens between the ages of 18 and 40 can open their accounts and receive a monthly pension of ₹1,000 to ₹5,000 after retirement by making regular contributions.
The best part is that this scheme not only provides financial support, but also gives an assurance that you can live with your dignity in old age. The government officially launched this scheme on 9 May 2015 and since then, lakhs of people have joined it.
Why is Atal Pension Scheme necessary?
The unorganised sector in India is quite large which includes daily wage workers, rickshaw pullers, small vendors and domestic helpers. These people do not have any kind of pension system after retirement. Atal Pension Scheme is one such initiative which gives these people an assured income in old age.
The main objective of this scheme is that even low-income citizens can make their lives secure by making small savings for their future. It is also a social message that no matter what your income is, every citizen deserves a safe and self-dependent old age.
Benefits of Atal Pension Scheme
The biggest benefit of this scheme is that the government guarantees a minimum pension. Meaning if the actual return on your contribution is less than the estimate, then the government itself fills that gap. Because of this, you will get a guaranteed pension in every situation.
The second benefit is that if your investment gives a higher return than expected, then that extra money also gets added to your account. After retirement, you will get a pension of ₹1,000 to ₹5,000 every month which will help in fulfilling your financial needs.
If the account holder dies, then the spouse continues to get the pension. And when both husband and wife die, the total corpus is transferred to the nominee. Apart from this, the contribution is automatically deducted from your bank account, so there is no need to visit the office or branch again and again.
Rules for taking Atal Pension Scheme
There are some specific eligibility criteria to join this scheme. You should be an Indian citizen, you should not be a taxpayer, and you should have a valid savings bank account. Your age should be between a minimum of 18 years and a maximum of 40 years. Also, you should not be a member of any other social security scheme like EPF.
These eligibility conditions ensure that this scheme is only for those people who will not have any other income source available after retirement.
How to contribute in Atal Pension Scheme?
The contribution option is quite flexible. You can contribute monthly, quarterly or half-yearly as per your comfort. The amount of contribution depends on your entry age and how much pension you want to receive (₹1,000 – ₹5,000).
The sooner you join this scheme, the lesser is the monthly contribution you have to make. For this reason, financial experts suggest that if you are eligible, you should start the scheme in the age bracket of 18–25, so that you can secure more pension with less contribution.
What do you learn from Atal Pension Scheme?
Atal Pension Scheme is a reminder that financial planning is not just for the high-income group, but is equally important for low-income and unorganized sector workers. This scheme gives every citizen an equal opportunity to make his old age secure and dignified.
This scheme has given a positive message that life after retirement can also be secure if you plan timely. The minimum pension guarantee from the government makes it even more trustworthy.
Disclaimer:
All the details given in this article are based on official government reports and verified market sources. Always take the advice of your financial advisor or certified expert before taking any financial or investment decision.
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