If you are not a government employee, ie. someone who is entitled to receive a pension from the government, purchasing a pension plan will be in your best interest. Investing in a pension plan during your working years is a good way to grow your savings and establish an income for your life post retirement. These plans let you accumulate a part of your savings over time and have a steady pay out once you make the transition to retired life. Buying a pension plan is also considered a much safer way to save towards retirement, in comparison to stocks, mutual funds etc. To help you make the right choice while investing in a plan, here are a few points to keep in mind:

• Some of the different types of pension plans you can invest in:

1. Annuity Plans: Almost all life insurance companies in India offer annuity plans within their product portfolio. The premium are paid for these policies usually as a lump sum when purchasing the policy or over the stipulated number of policy years. Upon maturity, you will start receiving annuity from the insurance provider, which will contribute towards a steady source of income during retirement.
2. National Pension Scheme (NPS): The NPS is a government-backed pension scheme. Under the National Pension Scheme, your savings/investments are pooled into a pension fund, which is then invested by fund managers into diversified portfolios. This investments comprise of bonds, bills, debentures and shares. This investment will accumulate and grow over the years, which can then be used to purchase an annuity or you may withdraw a part of it as a lump sum.

• When should you start investing in a pension plan:

With retirement planning the general rule is, the earlier the better. In that case it is good to start in a pension plan as early as in your 20s. you can also consider opening an account with the NPS or,contributing towards VPF or buy a pension unit linked plan . Subsequently, investing in annuities from an early stage can see a substantial growth in your savings. 

• What is the best pension plan in India as of 2019?

In the financial world, nothing is absolute; there is not just one pension plan that can be categorised as the best for all investors. Depending on your portfolio and risk tolerance level there will be slight differences between plans that you could exploit. 

Further, since the terms and conditions of the pension plans are always changing, it would be in your best interest to consult a certified financial planner or wealth management before choosing a plan. They will review your portfolio and help you find the right investments.

If you have not started thinking about your retirement yet, don’t wait any longer. Find the right pension plan for you and start investing as soon as possible.