Think again about National Pension System (NPS)

People generally believe that if you want to save for retirement, then you should invest in such a scheme, which is only for this purpose. But this is not true. You can save in other ways also and later it can be used in planning for retirement.

Due to the presence of products like Employee Provident Fund (EPF) and National Pension System (NPS), people prefer such schemes for retirement plans. These schemes have been specifically stated to cater to the needs of retirement. There is also the benefit of tax exemption on investing in these schemes. Hence they are also called tax saving. Overall, big greed to save for retirement is also to reduce tax liability, but it is not the case that if you deposit money in a bank or in a mutual fund scheme, it can be used for post-retirement needs. Can not Like any other savings, retirement savings should also be assessed on the basis of safety, liquidity, returns and tax savings. Retirement is another major problem with traditional or old thinking about saving. This problem is related to not understanding the risk properly or at all. Traditional thinking says that the value of your investment should not be reduced in the slightest. At the same time, this thinking completely ignores the fact that inflation is reducing the real value of your investment year after year. Some people are fortunate to have such a source of income which increases income as inflation increases. Like property. This gives them good ratoon. Other people who do not have property, they need to make extra efforts to deal with the impact of inflation throughout life.

The biggest risk in investment is about short-term fluctuations. Equity may have the risk of fluctuations in the short term, but by investing in the long term, returns are offset by this risk. One should not worry about long term investment fluctuations. In the long term, profits will be almost fixed. For those who want to save for retirement but do not want to take time to choose the right option for this, National Pension System (NPS) is the right option. Whether it is the need to invest for retirement while working or the need to use the amount after retirement, the National Pension System (NPS) meets both standards. The National Pension System (NPS) works as a mandatory pension system as well as an automatic pension system. Central and state governments are using the compulsory pension system for their employees.

However, it is regrettable that the voluntary scheme of the National Pension System (NPS) has not been able to gain much popularity among the people. Most financial advisors are not suggesting adopting the National Pension System (NPS) to meet their retirement needs. Apart from this, they sell or recommend to the savers to buy products which are not suitable according to their needs.