The PFRDA managed NPS is best for less disciplined individuals who are very often tempted to short close their investment product for immediate expenses.
Pension is the livelihood for many in the retired stage of life as it gives financial security to live a decent life. Every individual has to plan for retirement to enjoy the old age. People can accumulate wealth through mutual funds, fds, epf or ppf. But problem here is they provide liquidity by way of withdrawals and loans.
This certainly do tempt the less disciplined people who are the major percentage in society to withdraw or foreclose the retirement fund for some contingencies. They end up with little or no pension corpus to manage their retirement life, forcing them to depend on somebody.
The National Pension System (NPS) is a boon for such people since it does not encourage premature withdrawals. So the fund saved for pension is utilised for pension only thus saving the retirement life.
Lets see about the maturity proceeds
One has to invest till 60 years of age to accumulate wealth.
No Loan option.
If anyone intends to short close before 60 years, they have to purchase an annuity for 80% of value and only 20% can be cashed out.
After 60 years, the option is to buy an annuity(pension) for minimum 40% of fund value and rest can be cashed out.
Go for NPS and Happy Retirement.
Readers please give your comments and questions.