NPS
NPS (National Pension System)
The National Pension System (NPS) is a government-backed voluntary retirement savings scheme designed to help you secure a financially stable future. It's a versatile tool that empowers you to plan for your retirement with flexibility and potential for significant returns.
How it Works:
- Regular Contributions: Make regular or one-time contributions to your NPS account.
- Investment Choice: Select from various investment options, including equities, government bonds, and corporate bonds, based on your risk appetite.
- Professional Management: Your funds are managed by experienced fund managers.
- Retirement: A portion of your accumulated corpus is used to purchase an annuity, providing you with a regular pension income.
- Tax Advantages: Enjoy tax benefits on contributions and returns.
- Diversification: Spread your investments across various asset classes to mitigate risk.
- Portability: Carry your NPS account across different jobs and locations.
- Government Backing: Benefit from the government's oversight and regulation.
- Market-Linked Returns: Potential for higher returns through investments in equities and other market-linked instruments.
Tier I and Tier II Accounts
Tier I Account: The core retirement account, offering tax benefits under Section 80C and 80CCD(1B) of the Income Tax Act. Withdrawals are restricted, ensuring long-term savings.
Tier II Account: A voluntary savings account with no withdrawal restrictions. It doesn't offer tax benefits but provides flexibility for additional savings.
Pension Fund Managers (PFMs)
You can choose from a list of authorised PFMs to manage your investments. These professionals invest your contributions in various asset classes as per your chosen investment option.
Investment Options
Asset Classes
- Equity (E): Invest in stocks of companies, offering the potential for higher returns but also higher risk.
- Corporate Bonds (C): Invest in bonds issued by corporations, providing a balance of risk and return.
- Government Bonds (G): Invest in government securities, offering lower risk and stable returns.
- Alternative Investment Funds (A): Invest in alternative investment funds, such as Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).
Investment Choices:
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Active Choice: Allows you to actively choose the allocation percentage among different asset classes based on your risk tolerance and investment goals.
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Auto Choice: A lifecycle fund that automatically adjusts your asset allocation based on your age, reducing risk as you approach retirement.
At Systematic Investments & Financial Services, our mission is to provide our clients with the best SERVICE in wealth creation and wealth management. We are driven to provide clients with simple, unbiased and uncluttered professional advice that adds value to their quality of life and results in actionable solutions.
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