Atal Pension Yojana or APJ, promoted by Govt. of India recently, is a pension scheme towards retirement benefits, after the age of 60. An individual within the age group of 18 years to 40 years currently can avail this scheme by contributing Rs.42/- to Rs.210/- monthly (18 years age slab), till the age of 60 years. In case one participates before 31st Dec 2015, GOI will contribute 50% of annual contribution or Rs.1000/-, whichever is higher, for 5 years as promotional benefit. By doing so, one can look forward to a monthly pension of Rs.1000/- to Rs.5000/-, guaranteed by Govt. of India, from the age of 61 years till death or life partners death. After that individual’s nominee will receive 1.7lacs to 8.5lacs as maturity benefit.
Can I apply?
APJ scheme sounds very attractive, but once you do a simple back dated calculation, it works out to be a dampener. Taking PPF as a benchmark & current interest rate of 8.7% compounded annually, on annual contribution of Rs.2520/-, from the age of 18 years, one can look forward to a corpus of 10.15 lacs on 61st birthday, against a corpus of 8.5lacs in APJ scheme. Pension of Rs.5000/- from 61st year monthly, in APJ scheme, works out @7% interest rate, which in any case is offered by all banks & major fund houses. Plus one has better choices & higher returns on corpus saved.
If Mutual Fund equity SIP is taken as benchmark on above calculation, @ 15% CAGR, one can look forward to corpus of 68.24 lacs on 61st birthday.
Whichever one chooses, based on preference, profile & risk, one has an option of PPF on the lower spectrum or equity mutual fund on the higher side or combination of both. Therefore it is recommended to invest your hard earned money wisely, based on returns & risk assessment as the key factor and not on advertisements or guaranteed claims.
Who is this scheme meant for?
If one can understand, these schemes are meant for people who fall on the low income category, where banks & bigger institutes were not participating earlier, making the Govt. of India launching & promoting these schemes.