Employees working in Pvt Company need to plan their Retirement Goals through NPS.
Before we start discussing about why employees working in private companies need to plan their retirement goals through NPS, lets discuss what options do we (Salaried Employees) have in our hand for our retirement planning.
Before taking any decision regarding investment in any financial assets we should be well aware of its working, advantages & disadvantages etc.
There are multiple ways one can invest for their retirement based on their own understanding of various financial assets available to invest or take guidance from financial advisor. However, majority of people invest in
- Public Provident Fund (PPF)
- Purchase Insurance policy with money back gurantee with very high premiums including ULIPs
- Voluntary Provident Fund (Not every one invests in this)
- Employee Provident Fund (EPF through employers).
- Mutual Fund — Retirement Plan Scheme
Below table shows various investment option that can be used for retirement planning and their returns as well as the expenses we have to pay to AMC / Bank / Insurance companies.
As we can see, National Pension System has the lowest expense ratio of 0.02% and it provides returns at par with Mutual Fund, since the Pension Fund Managers invests in Market just like how mutual fund works! But with less expense ratio.
Now lets discuss the main agenda as why employees in Pvt companies need to invest in NPS.
Previously employees working in private companies / organization did not have many options in which they can invest and plan their retirement due to which at retirement they only got Gratuity, Provident Fund and very less Pension. Hence, government introduced National Pension System which focused only on retirement planning and making sure that we plan our retirement life well in advance.
National Pension System is regulated by PFRDA and is very secure. Hence, we can be rest assured about our investment in NPS and plan our retirement in correct way with Sahi Savings!
