5 NPS monthly pension options that National Pension System account holders get after retirement
NPS Retirement Planning: In NPS, at the age of 60 years, the NPS account holder gets the option to withdraw up to 60 per cent of their retirement corpus and invest the rest 40 per cent to purchase an annuity. The purpose of investing annuity is to get a monthly pension.
5 Types of NPS Pensions: National Pension System (NPS) is a marker-linked retirement scheme where one can start contributing at the age of 18 and can contribute till 75 years of age. At the age of 60 years, they get the option to withdraw up to 60 per cent of their retirement corpus and invest the rest 40 per cent of income to purchase an annuity. The purpose of investing annuity is to get a monthly pension. Pension fund house managers invest annuity income in a fixed interest scheme from where the NPS account holder gets a monthly pension. When NPS accountholders opt for annuity plans, they can opt for 5 types of pension plans. Here are the details-
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NPS: Annuity for life with ROP (Return of purchase price)
In this type of NPS annuity, the NPS account holder (annuitant) gets the monthly pension. After their death, the annuity amount ceases and the purchase price is returned to the nominee.
NPS: Annuity for Life without ROP
Here, on the death of the NPS account holder (annuitant), the payment of the annuity will cease and the purchase amount will not be returned to the nominee.
NPS: Joint life annuity with ROP
On the death of the annuitant, annuity is paid to the spouse during their lifetime, and the purchase price is returned to the nominee after the death of the spouse.
NPS: Joint life annuity without ROP
On the death of the annuitant, annuity is paid to the spouse during their lifetime. If the spouse predeceases the annuitant, payment of the annuity will cease after the death of the annuitant.
Family income with ROP
This option is available to government sector employees only. In this option, the annuitant gets annuity for life.
Family income with ROP
After their death, the spouse will get it for a lifetime. After the death of the spouse, the annuity payment will go to the living dependent mother and father of the deceased annuitant.
Family income with ROP
After the coverage of these family members, the annuity payment will cease, and the 100 per cent payment will be returned to the surviving children of the annuitant, and in the absence of children, legal heirs of the annuitant.