How to Calculate Your Pension under Atal Pension Yojana
Objectives of the Atal Pension Yojana
Atal Pension Yojana (APY) is a government-sponsored social security scheme initiated by the Government of India. It is aimed to provide a stable income in form of a pension to the unorganized sector’s workers after their retirement. One significant concern when joining any pension scheme, like APY, is to understand the payout you will receive after retirement. This article focuses on how to calculate your pension under Atal Pension Yojana.
Key Features of Atal Pension Yojana
To start with, let’s briefly understand the basics of Atal Pension Yojana. The scheme guarantees minimum pension ranges from Rs. 1000 to Rs. 5000 per month depending upon the contribution made by the individual. The pension starts when the individual attains the age of 60. The contribution under this scheme begins when one attains the age of 18 years and continues till the age of 40 years. Hence, the minimum period of contribution is 20 years.
The amount of pension under the APY is based on the amount contributed and the age of entry into the scheme. The sooner you join the scheme, the lower would be the contribution. The APY chart provided by the PFRDA (Pension Fund Regulatory and Development Authority) guides to understand the monthly contributions one needs to make to receive the desired pension after retirement.
Calculating Your Pension Under Atal Pension Yojana
To calculate the pension amount under the Atal Pension Yojana:
1. First, choose the monthly pension amount you wish to receive upon retirement. This can be Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000, or Rs. 5000.
2. Next, look at your present age and the age you aim to retire. The difference between these two ages gives you the number of years that you will contribute to APY.
3. Now refer to the APY chart. Based on your chosen pension amount and years of contribution, you would be able to find out the monthly contribution amount that you need to make.
Examples of Pension Calculation
If a person enters the APY scheme at 18 years with the desired pension of Rs. 5000, he will contribute until he turns 60. According to the APY contribution chart, he will have to contribute Rs. 210 monthly for a pension of Rs. 5000/month.
However, if a person enters the scheme at 40 years of age with a similar desired pension of Rs. 5000/month, as per the chart, his monthly contribution would be Rs. 1,454.
Thus, it becomes clear that joining the scheme at an early stage means having to contribute a smaller amount.
Please note that in the event of the contributor’s death, the spouse will be entitled to receive the same pension as that of the contributor.
It is essential for individuals to understand the concept and working of the Atal Pension Yojana scheme and its pension calculation before subscribing to it. By referring to the APY contribution chart and considering the age of entry and desired pension amount, one can get a fair understanding of the monthly contribution that needs to be made under this scheme.
Disclaimer:
This article is meant to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. You should evaluate your options, keeping in mind all the advantages and disadvantages before trading in the Indian financial market.
Summary:
Understanding how to calculate your pension under Atal Pension Yojana is critical in planning for your retirement. The scheme guarantees a minimum pension ranging from Rs. 1000 to Rs. 5000 depending on the amount and duration of contributions. The APY is all about your ages of entry and exit from the scheme, and the desired monthly pension. By referring to the APY contribution chart and considering your age and the desired pension amount, you can easily calculate the monthly premium you would need to contribute. While this article provides a basic understanding, it is always advisable to seek expert advice based on your specific requirements. Always consider the pros and cons before diving into the Indian financial market.
