4 Conditions When NPS Provides More Than Tax Savings
TRUE COD
In this video, we discuss four conditions when NPS typically works and provides much more than tax savings
Edited Highlights
0:24 If you have exhausted your tax deduction under Section 80C, people will point out to you National Pension System or NPS where you get an extra deduction of Rs 50,000 under Section 80CCD
0:35 There are four conditions where NPS typically works. After all, you shouldn't be going for tax deduction just for the heck of it
0:57 We are discussing the four conditions when NPS typically works
1:25 First condition when NPS works well is when you want to do extra tax savings and direct them towards retirement
1:51 This can come in handy if you are starting out doing your retirement savings a little late or you have made withdrawals from your retirement savings like provident fund and need to replenish it
2:16 The other condition when NPS works for you is when you anticipate the need for a lump sum on retirement
2:31 For NPS, 60% of savings at age 60, basically on retirement comes to you as a tax free lump sum
2:38 This money is useful when you need to relocate on retirement or for expenses like doing up your home on retirement
2:58 The third conditions when NPS works is when you need regular retirement since on retirement, you will need to replace your regular pay or salary
3:22 NPS, like all good retirement plans, has the provision of regular 40% of savings on retirement
3:30 The portion of the retirement savings has to be compulsorily converted into regular retirement income by purchasing regular income providing annuities
3:38 Annuities are financial products that provide regular retirement income
3:53 If you don't have a provision for regular retirement income and don't want the bother of converting your retirement savings to regular retirement income on retirement but prefer retirement savings product to do it, NPS is for you
4:08 The fourth condition when NPS works for you when you are sure that you wouldn't need the money in the near future requiring premature withdrawal from NPS
4:16 Remember, you can't access the money in NPS before the completion of 10 years
