Atal Pension Yojana, BFFs Of Retirement: Earn Rs 5,000 Pension Per Month, Rs 8.5 Lakh Returns In AYP - How?

It's safe to say Atal Pension Yojana (APY) is a best friend for retirement. APY is a voluntary pension scheme launched by the Government of India for all Citizens of India, especially the poor, the underprivileged and the workers in the unorganised sector. APY offers pensions in the range of Rs 1,000 to Rs 5,000 per month and indicative returns amount after users attain over 60 years of age. The contribution to APY is also very affordable.

Under the APY, a minimum guaranteed pension of Rs 1,000/- or 2,000/- or 3,000/- or 4,000 or 5,000/- per month will start after attaining the age of 60 years, depending on the contributions made by the subscribers for their chosen pension amount, as per PFRDA guidelines.

Meanwhile, in general terms, a Pension provides a monthly income to the old age people when they are not working. There are several reasons why senior citizens need pensions such as -- decreased income earning potential during old age; increased life expectancy; tenure of retired life is almost the same as working life; rise in cost of living/Inflation; migration of earning members; the rise of culture of the nuclear Family; and dignified life in the old age due to less financial dependence.

APY is open to all citizens of India who fulfil the age criteria of 18 to 40 years. Also, he or she should have a savings bank account/ post office savings bank account. Furthermore, with effect from October 1, 2022, any Indian citizen who is or has been an income-tax payer under the Income-tax Act, 1961, as of the date of application will not be eligible to open a new APY account.

To open an APY account, citizens need to approach the bank branch/ post office where the individual's savings bank account is held or open a savings account in a bank or post office if the individual doesn't have one. Also, prospective applicants may provide a mobile number to the bank during their enrolments under APY to receive periodic updates on their APY account as well as on the scheme. Aadhaar may also be provided at the time of enrolment as the APY is notified for the same.

Notably, an existing NPS subscriber can also subscribe to APY, if he/she meets the basic eligibility criteria, for availing benefits guaranteed by the Government of India under the scheme.

An APY subscription is entitled to the following benefits:

- Central Government guaranteed minimum pension amount: Each subscriber under APY shall receive a Central Government guaranteed minimum pension of Rs.1000 per month or Rs.2000 per month Rs.3000 per month Rs.4000 per month or Rs.5000 per month, after the age of 60 years until death.

- Central Government guaranteed minimum pension amount to the spouse: After the subscriber's demise, the spouse of the subscriber shall be entitled to receive the same pension amount as that of the subscriber until the death of the spouse.

- Return of the pension wealth to the nominee of the subscriber: After the demise of both the subscriber and the spouse, the nominee of the subscriber shall be entitled to receive the pension wealth, as accumulated till age 60 of the subscriber.

The subscribers are required to contribute the prescribed contribution amount from the age of joining APY till age 60 to enjoy the triple benefits.

For contributing towards the APY account, as per the guidelines, this depends upon the age of the individual at the time of opening of the APY account, frequency of contribution and the pension slab chosen.

The age-wise, frequency and pension slab-wise contribution table is provided:

According to PFRDA data, at the age of 18 years old, citizens can contribute merely Rs 210 monthly, Rs 634 quarterly, and Rs 1,281 yearly for Rs 5,000 pension per month along with indicative returns of Rs 8.5 lakh after hitting 60 years of age/

If the citizen is 30 years old, then the contribution amount increases to Rs 577 monthly, Rs 1,743 quarterly, and Rs 3,520 annually. Citizens can also invest at the age of 40 as well, but the contribution amount further scales up to Rs 1,454 monthly, Rs 4.391 quarterly, and Rs 8,871 annually -- for Rs 5,000 pension per month and indicative returns of Rs 8.5 lakh.

The APY account can be kept persistent by making regular contributions towards the scheme. APY provides the option to the subscribers to change the contribution frequency (Monthly/Quarterly/Half Yearly) as per the earning frequency of the subscriber. Also, the subscriber can maintain persistence by paying all the overdue contributions along with the interest.

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