National Pension Scheme (NPS) for Senior Citizens in India

The National Pension Scheme, shortly NPS, is a pension scheme initiated by the government. The Government of India established this for fresh recruits to the central government, barring the armed forces, in 2004 and then extended it to all Indian citizens, including the elderly subsequently. NPS has been an answer to many who were increasingly worried about old-age financial security, creating a corpus to sustain the post-retirement life of an individual. The present article will address the NPS rules and regulations for senior citizens and their merits, demerits, along with strategies which can be applicable for seniors of the old age. 1. Overview of National Pension Scheme (NPS) NPS is defined contribution, governed by Pension Fund Regulatory and Development Authority, or PFRDA; a voluntary retirement saving scheme. In NPS, a part of the income or salary of an individual gets accrued into his NPS account. This amount grows over time through investment in different types of assets like government bonds, equities, and corporate debt. The corpus can be withdrawn at retirement to buy an annuity that then generates a regular stream of income. The NPS was actually intended for people in the working age group. However, it later accommodated senior citizens, ensuring older individuals could reap from this long-term investment scheme. 1.1 Senior Citizens and NPS The Government of India made special provisions under the NPS so that the elderly citizen can benefit from the scheme at a later age, since retirement savings schemes under the old scheme may not always suffice to fulfill post-retirement requirements. Under the rules currently prevailing, Indians above the age of 60 years are entitled to open an NPS account in the Senior Citizens\' NPS Scheme. Even contribution up to age 70 is allowed under the scheme. The scheme proves to be flexible and tax effective for even persons on the brink of retirement, to save up for their respective retirements. 2. National Pension Scheme rules for senior citizens The senior citizens rules under the NPS are so designed as to make the NPS accessible to its members who have, at their disposal, minimal amount of time to make a corpus via pension benefits. Some of the most significant conditions which are applied in relation to NPS to the elderly are as follows. 2.1 Eligibility Conditions The eligibility conditions relating to joining NPS by the senior citizens are that one should be aged between 60 years and 70 years. Indian Citizens: NPS is provided only for Indian citizens, even NRIs Existing NPS Account Holder: The people holding an existing NPS account can continue their contributions to the account after crossing 60 years of age subject to the requirement set by NPS authorities 2.2 Contributions Minimum Contribution: Minimum contribution to open an NPS account is ₹500, and all subsequent contributions have to be ₹500 per annum. Maximum Contribution: There is no upper limit on contributions; a senior citizen can inve