Among all objectives for investments, one of the major objectives is social security, including securing enough savings for post-retirement life. One such option to save for post-retirement life is the Atal Pension Yojana, which is a government scheme. The scheme assures a guaranteed monthly pension for subscribers between Rs 1,000 and Rs 5,000, depending upon the contribution amount. Here’s all about the scheme:
What is Atal Pension Yojana?
The scheme, which is a central government scheme for income security in the old age, was announced in the Union Budget for 2015-16. It is focused on all citizens in the unorganised sector. Through the APY, the government is making efforts to address the longevity risks among the workers in the unorganised sector and to encourage the workers in unorganised sector to voluntarily save for their retirement.
The scheme is administered by the Pension Fund Regulatory and Development Authority (PFRDA) through the National Pension System (NPS) architecture.
What’s The Eligibility To Join The Scheme?
APY is applicable to all citizens of India aged between 18 and 40 years. Aadhaar will be the primary KYC. Aadhaar and mobile numbers are obtained from subscribers for the ease of operation of the scheme. If not available at the time of registration, Aadhaar details may also be submitted later stage.
Benefits of Atal Pension Yojana
Under the Atal Pension Yojana, there is guaranteed minimum monthly pension for the subscribers ranging between Rs 1,000 and Rs 5,000 per month. The benefit of the minimum pension would be guaranteed by the Government of India.
The Centre contributes 50 per cent of the subscriber’s contribution or Rs 1,000 per annum, whichever is lower. Government co-contribution is available for those who are not covered by any Statutory Social Security Schemes and is not income taxpayer.
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How To Get Rs 5,000 Pension?
The early you start investing under the scheme, the lesser monthly amount you need to contribute to get Rs 5,000 pension. Anyone who is joining at the age of 18 will have to contribute just Rs 210 per month to get a guaranteed monthly pension of Rs 5,000.
At the age of 18, if you start contributing in APY to get Rs 4,000 a month after retirement, you will have to invest just Rs 168 per month till the age of 60 years. To get Rs 3,000, the person will need to invest Rs 126 per month; if one wants Rs 2,000 pension, a monthly contribution of Rs 84 will be required. If one wants Rs 1,000 per month pension, the person will need to contribute just Rs 42 per month under the APY.
However, those planning at the age of 40 years to start investing and get a pension of Rs 5,000 can do so by investing Rs 1,454 per month till the age of 60 years.
Exit From the Scheme
On attaining the age of 60 years: The exit from Atal Pension Yojana is permitted at the age with 100 per cent annuitisation of pension wealth. On exit, pension would be available to the subscriber.
In case of death of the subscriber due to any cause: In case of death of subscriber pension would be available to the spouse and on the death of both of them (subscriber and spouse), the pension corpus would be returned to his nominee.
Exit before the age of 60 years: Exit before 60 years of age is not permitted. However, it is permitted only in exceptional circumstances, i.e., in the event of the death of the beneficiary or terminal disease.
