Employee Provident Fund (EPF) and pension schemes are very important for working people in India. These plans help in making your life after retirement secure and comfortable. But do you know that if your PF is cut, you can get more than one pension?
In this article we will tell you how you can get more than one pension through your PF. We will give detailed information about pension schemes and also tell you how you can increase your benefits. So let’s get started and know how you can make your future even more secure.
Introduction to PF and Pension Schemes
Employee Provident Fund (EPF) is a scheme that helps secure the future of employees. Under this scheme, both the employee and the employer deposit a fixed amount every month. This money is received as a lump sum at the time of retirement.
Pension plans provide regular income after retirement. There are many types of pension schemes in India, such as Employees’ Pension Scheme (EPS), Atal Pension Yojana (APY), and National Pension Scheme (NPS).
Overview of PF and pension schemes
| name of the scheme | Main characteristics |
| Employees Provident Fund (EPF) | – Both employee and employer contribute – Receives lump sum amount on retirement – Tax benefits |
| Employees Pension Scheme (EPS) | – Part of EPF – Provides monthly pension – Provision of family pension |
| Atal Pension Yojana (APY) | – For unorganized sector employees – Guaranteed monthly pension – Low premium |
| National Pension Scheme (NPS) | – For government and private sector employees – Flexible investment options – Tax benefits |
How can one get more than one pension?
Now you must be wondering how one can get more than one pension. there are many ways:
- Combination of EPF and EPS: If you are contributing to EPF, you automatically become a member of EPS also. With this, you will get both lump sum amount (EPF) and monthly pension (EPS) on retirement.
- Investing in NPS: Apart from your EPF, you can also invest in NPS. This will provide you with an additional pension.
- Benefit of APY: If you work in the unorganized sector, you can avail the benefit of APY. This will give you a guaranteed monthly pension.
- Private Pension Plans: You can also invest in private pension plans offered by insurance companies or mutual funds.
Benefits of Employees Provident Fund (EPF)
EPF not only secures your future but also offers many other benefits:
- Tax Benefits: Contributions made to EPF are eligible for tax exemption under Section 80C of the Income Tax Act.
- Guaranteed Returns: EPF offers interest at a rate decided by the government, which is often higher than other investment options.
- Emergency Withdrawal: Under certain circumstances, you can make partial withdrawal from your EPF account.
- Life Insurance Cover: EPF members also get life insurance cover through the EDLI (Employee Deposit Linked Insurance) scheme.
Features of Employee Pension Scheme (EPS)
EPS is an important part of EPF and it offers several benefits:
- Monthly Pension: After retirement, you get regular monthly pension.
- Family Pension: After the death of the member, his family gets pension.
- Disability Pension: If a member becomes unable to work, he gets a disability pension.
- Withdrawal Option: If a member leaves the job before the age of 58 years, he can withdraw his share amount.
Benefits of National Pension Scheme (NPS)
NPS is a voluntary pension scheme that offers several benefits:
- Flexible Investment: You can invest your money in equities, corporate bonds, and government securities.
- Tax Benefits: Investments in NPS provide additional tax benefits.
- Portability: You can move your NPS account from one job to another.
- Partial Withdrawal: Under certain circumstances you can make partial withdrawal from your NPS account.
Main points of Atal Pension Yojana (APY)
APY is a social security scheme for unorganized sector employees:
- Guaranteed Pension: This scheme offers a guaranteed monthly pension ranging from Rs 1000 to Rs 5000.
- Low Premium: Contribution can be made with low premium.
- Government co-contribution: The government also contributes to the scheme with certain conditions.
- Tax Benefits: Contributions made to APY are also eligible for tax exemption.
Strategy to get more than one pension
Now that you know it’s possible to have more than one pension, here are some strategies you can adopt:
- Maximum utilization of EPF and EPS: Maximize your EPF contribution so that you can take full advantage of EPS also.
- Invest in NPS: Apart from your EPF, invest in NPS also. This will provide you with an additional pension stream.
- Take advantage of APY: If you are eligible, join APY. This will give you a guaranteed pension.
- Consider private pension plans: Invest in private pension plans based on your income and risk appetite.
- Regular review: Regularly review your pension plans and update them when needed.
Things to keep in mind while investing in pension schemes
Some important things to keep in mind while investing in pension plans:
- Estimate your income and expenses: Make an accurate estimate of your current income and future expenses.
- Start early: The sooner you start investing in pension plans, the more benefits you will get.
- Diversify: Divide your investments among different pension schemes to reduce risk.
- Understand the terms and conditions: Understand the terms and conditions of every plan thoroughly.
- Tax Planning: Take full advantage of the tax benefits available from pension plans.
Disclaimer
This article is for informational purposes only. Please consult government websites or certified financial advisors for accurate and up-to-date information about pension plans and investment decisions. Rules and provisions may change over time. Consider your personal circumstances and risk tolerance before making any financial decisions. The author or publisher is not responsible for any loss or damage that may occur from the use of this information.
