Central Govt. Pension Scheme: Invest Rs. 7 per Day to Receive Rs. 60000 Pension & Other Benefits

Employees in the private sector, especially blue-collar workers, are concerned about their retirement because the majority of them do not invest in any retirement accounts due to low income.

It is also worth mentioning that these private-sector employees can safeguard their retirement by contributing as little as Rs.7 per month in a central government-backed pension scheme. 

This pension scheme, known as Atal Pension Yojana (APY), is run by the government of India and is managed by the Pension Fund Regulatory and Development Authority (PFRDA). APY is an appealing alternative for people looking to receive a guaranteed fixed amount as a pension once they retire. The pension scheme was launched by the government in 2015 to provide income security in old age to people in the unorganized sector. 

Who can invest in APY? 

Any Indian citizen with a bank account who works in the unorganized sector and belongs to the age group of 18-40 years, can invest in the Atal Pension Yojana. The Atal Pension Yojana is managed by the Central Government through the National Pension Scheme (NPS) architecture. 

Investors who have invested in the Atat Pension Yojana will start receiving the benefits at the time of retirement at the age of 60 years, which means that investors will have to invest for a minimum of 20 years in the scheme. 

Investors in this scheme receive monthly pensions until their death. In the event of the investor's death, his or her spouse continues to receive pension benefits until the investor's death. In the case of the investor's and spouse's deaths, the entire corpus is transferred to the nominee's account. 

How much money do you need to invest in order to receive Rs.60000 pension annually? 

Indicative Monthly Contribution Chart: 

The investor gets five monthly pension alternatives in this scheme: Rs.1000, Rs.2000, Rs.3000, Rs.4000, and Rs.5000. The monthly contribution amount will be determined based on the amount of pension he/she intends to receive after retirement and his/her age. For example, if you are 18 years old and want Rs.5000 monthly pension from the age of 60, you must contribute Rs.210 every month, which is equivalent to Rs.7 per day. 

If the subscriber begins investing late, the required contribution amount for the same pension amount (Rs 5000) increases. For example, if you begin investing in APY at the age of 40, the maximum entry age, you must pay Rs.1454 per month to receive Rs.5000 monthly pension or Rs.60000 annual pension. 

The chart above depicts the approximate amount you must invest every month in order to get a fixed amount of pension every month. In addition, the monthly premium you pay qualifies for tax deduction under Section 80C.