7.1 Retirement Planning on retirementttt

Retirement planning

1. Retirement Planning &
Education Planning

2. Retirement Planning Avenues

3. Public Provident fund
•Public provident fund act 1968
•The Public Provident Fund Scheme is a statutory scheme
of the Central Government of India.
•The Scheme is for 15 years. This can be opened by an
individual of any age group.
•The rate of interest is 7.1% compounded annually.
Credited at the end of financial year

4. PPF
•Minimum deposit - 500/- & Maximum - Rs. 1,50,000/-
•One deposit of minimum amount of Rs.500/- is mandatory in
each financial year.
•Deduction u/s 80C
•Interest is exempted from tax
•After 15 yrs it can be extended for the period of five years
•The PPF account can not be attached by any court of law.

5. PPF- Loan
•Loan is available after 3
rd
year till the end of 6
th
year
•The loan amount can be a maximum of 25% of the total
available amount.
•A second loan can be taken only after the first loan is repaid
fully.

6. PPF- Partial Withdrawal
•Permissible from year 7 i.e. on completing 6 years
•Maximum of 50% of the amount
•Of the balance at the end of the 4th year (preceding the year
in which the amount is withdrawn or at the end of the
preceding year, whichever is lower).
•Further, withdrawals can be made only once in a financial
year.

7. National Pension Scheme
•Regulated by Pension Fund & Regulatory Authority
(PFRDA)
•Market Linked Scheme
•Two Tiers available- Tier 1 & Tier 2
•Exit option available after 10 years.
•The minimum deposit is 1000/- and maximum is No
Limit.
•Age Eligibility to open – 18-70 years

8. NPS- Benefits
•Flexible
•Simple and Tax efficient
•Portable
•Regulated and Transparent
•Dual benefit of Low Cost and Power of Compounding
•Online Access

9. National Pension Scheme

10. NPS- Asset Class
•Asset Classes
You need to choose the asset classes as well Pension Fund
Manager (PFM) along with the percentage allocation to be done
in each scheme.
•There are four asset classes from which the allocation is to be
specified under a single PFM
•Asset Class E – Equity and related instruments
•Asset Class C – Corporate debt and related instruments
•Asset Class G – Government Bonds and related instruments
•Asset Class A - Alternative Investment Funds

11. NPS- Asset Class
While choosing the asset class, subscribers must note that
•The total allocation across E, C, G and A asset classes must be
equal to 100%.
•For Tier-II, you can allocate 100% to Equity.
•For Tier-I, you can allocate 75% to Equity.

12. National Pension Scheme

13. National Pension Scheme

14. NPS- Tax Benefits
•Tax benefits to employees on Self-Contribution
•Employees contributing to NPS are eligible for following tax benefits
on their own contribution:
•Tax deduction up to 10% of salary (Basic + DA) under section 80
CCD(1) within the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.
•Tax deduction up to ₹50,000 under section 80 CCD(1B) over and
above the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.

15. NPS- Tax Benefits
•Tax benefits to employees on Employer's contribution

•Eligible for tax deduction up to 10% of salary (Basic + DA) (14% if such
contribution is made by Central Government) contributed by
employer under Section 80 CCD(2) over the limit of Rs. 1.50 lakh
provided under section 80 CCE.

16. NPS- Tax Benefits
•Tax benefits to self-employed
Individuals who are self-employed and contributing to NPS are eligible
for following tax benefits on their own contribution

•Tax deduction up to 20 % of gross income under section 80 CCD (1)
with in the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.

•Tax deduction up to ₹50,000 under section 80 CCD(1B) over and
above the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE.

17. NPS- Tax Benefits
•Tax benefits on partial withdrawal from NPS account
•Eligible for tax exemption on the amount withdrawn upto 25% of the
self contribution, on such terms and conditions as may be specified
by PFRDA under section 10(12B).
•Tax benefit on purchase of Annuity
•Eligible for tax exemption on purchase of annuity upon attaining the
age of 60 or superannuation under section 80CCD(5). However, the
subsequent income received from annuity is subject to tax under
section 80CCD(3).
•Tax benefit on lump sum withdrawal
•Eligible for tax exemption on lumpsum withdrawal of 60% of
accumulated pension wealth upon attaining the age of 60 or
superannuation under section 10(12A)

18. Post Office Schemes- POS
•PPF
•Senior Citizen Scheme
•Sukanya Samriddhi Account
•NSC
•MIS
•RD
•KVP

19. POS- Senior Citizen Scheme
•Anyone above 60 years age- with exceptions
•Returns – 8.2 % p.a.
•The minimum deposit is 1000/- and in multiple of 1000/-.
Maximum Limit – 30 lakhs.
•Single / Joint account
•Account can be closed after 5 years
•Interest payable quarterly

20. POS- Sukanya Samriddhi Account
•By the guardian in the name of the child below 10
years of age
•Returns – 8.2 % p.a.
•The minimum deposit is 250/-. Maximum Limit – 1.50
lakhs.
•Deposit can be made for maximum 15 years

21. POS- Sukanya Samriddhi Account
•Deposits qualify for deduction u/s 80C
•Account can be closed
(i) After 21 years from the date of account opening.

(ii) Or at the time of marriage of girl child after attaining age of
18years.(but no closure is allowed before 1 month or after 3 months
from the date of marriage).Interest payable quarterly

Premature Closure is allowed in certain circumstances after 5
years

22. POS- Sukanya Samriddhi Account
•Withdrawal:-
(i) Withdrawal may be taken from account after girl child
attains age of 18 or passed 10th standard.

(ii) withdrawal may be taken up to 50% of balance available at
the end of preceding F.Y.

(iii) withdrawal may be made in one lump sum or in
installments, not exceeding one per year, for a maximum of five
years, subject to the ceiling specified and subject to actual
requirement of fee/other charges.

23. National saving certificate
•Minimum investment Rs. 1000
•Maximum investment – no limit
•Return is 7.7% per annum
•Maturity- 5 years
•Interest is taxable
•Deposits qualify for deduction u/s 80C

24. Kisan Vikas Patra
•Minimum investment Rs. 1000
•Maximum investment – no limit
•Return is 7.5% per annum
•Amount invested doubles in 115 months
•Maturity- As specified by the govt.

25. Monthly Income Scheme
•Minimum investment Rs. 1000
•Maximum investment – 9 lakhs- Single account & 15
lakhs in joint account
•In Joint Account- share should be equal
•Return is 7.4% per annum
•Maturity- Can be done after 5 years

26. Education Planning

•One of the most important goals as a parent

•It is an expensive affair

•Very important to plan the same

27. Significance of Education Planning
•Proper educational planning saves time, effort
and money.
•Educational planning is important for the best
utilization of available resources.
•Planning is essential in education for making one’s
educational journey purposeful and goal oriented.
•Education planning secures the child’s future
•Educational planning helps to understand the
educational goal of the child

28. Factors Affecting Educational Planning
•Tenure Of The Investment

•Risk Appetite

•The Overall Returns Generated

29. Strategies For Education Planning
IF INVESTING FOR LONG TERM, PUT AT LEAST 80% IN GROWTH
ASSETS
Age of Child What you should do
Start early to
gain from the
power of
compounding.
Increase the
amount as your
Educationcostis
rising at a fast
clip.
Given
thelongtime
horizon, invest
risk appetite is high.
byassumingan
inflation rate
of
for medium
risk.
or Sukanya
Samriddhi Yojana
(forgirls).
OPT FOR MEDIUM-RISK INVESTMENTS IF TIME HORIZON IS
SHORTER
Age of Child What you should do
Start a
recurring
deposit that will
mature in the
year the child
Equity and balanced
monthly
investment in line
with the
annualincreasein
your income.
lumpsu
m
fundsif
yo
high. Go for MIPs for
medium risk. Invest
in debtfunds todefer
tax till withdrawal.
GO FOR LOW-RISK INVESTMENTS IF THE GOAL IS VERY
NEAR
Age of Child What you should do
If you face a
money out of
equity. Start
a
MIP mutual funds
that carry low risk.
short-term debtfunds.
or put
themoney in
debt fund to
protect capital
shortfall, put less
that cannot be criticalgoals
onthe redeemed before
backburner. Don’t
clip into your
the child enters retirementcorpus.
college.

30. 5 Steps of Planning Child’s Education

31. Thank You