Retirement

New pension rules -GOLDEN SMILES :)

Posted by : latikav

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Pay Commission: New pension rules better pay panel package
-------------------------NEW DELHI: This should cheer former central government employees. With the Centre notifying the new pension rules, they can expect a higher pension packet from next month. The revised pensions are higher than what the sixth Pay Commission recommended.

Although the move benefits the cross-section of retired employees, those in higher brackets have gained more in real terms. New pensions for defence and railway personnel will be notified separately.

Older pensioners have an added reason to rejoice. Centenarians will get 100% extra pension calculated at revised rates. Similarly, those over 80 years will get an additional 20% of their basic pension. This goes up by 30%, 40% and 50% for those over 85, 90 and 95, respectively.

To get an idea of the quantum of hike, a person with a basic pension of Rs 10,000 — who used to get Rs 22,050 in hand — will now receive a total pension of Rs 26,216. The new rates are effective from January 2006 and the arrears will be given out in two instalments — 40% during the current fiscal, 60% in 2009-10 .

The maximum gratuity too has been revised to Rs 10 lakh, up from the earlier Rs 3.5 lakh. If an employee dies during service, his family will now get full pension (enhanced family pension) for 10 years.

The new rules also add more flexibility in retirement benefits. For instance, those who are due to retire can now get 40% of their pension commuted and get a lump sum amount in turn.

GOLDEN SMILES


Minimum pension Rs 4,060, up from earlier Rs 2,813 in hand (revised pension to be effective from Jan 1, '06).

Maximum pension Rs 52,200, up from Rs 33,075.

Maximum gratuity up to Rs 10 lakh (depending on years of service and last salary drawn).

Enhanced family pension, for employees dying in service, to be full pension for 10 years.

Employees eligible for full pension if service is for 20 years.

Incremental additional pension for those 80 years and above. People over 100 to get double pension.

(Courtesy: Timesofindia.com ) ...

Lump Sum Investment during Retirement

Posted by : ashalanshu

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Dear vsk_vijay, As his age is already 65 or may be 65 in current FY. The zero Tax limit for him 'll be 2.25L Rs. Although not much data regarding his current income & investments is available, still for his age investment in Land is strict no-no.

Invest in bank FDs & MFs as per his liquidity requirement. Even under MFs, invest in FMPs, Bond funds & MIPs. Avoid Eq. funds for his age.

Thanks

Ashal...

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Lump Sum Investment during Retirement

Posted by : vsk_vijay

My uncle is around 65 yrs. Recently he has got a lump sum of Rs.2 lacs as arrears. Please suggest whether investing in land/FD/MF would be better.

If anyone would suggest a good financial planner it would be of great help. Please mail me to vsk_vijay@in.com

Thanks.

Lump Sum Investment during Retirement

Posted by : RANJAN

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It all depends upon his present income. Upto 2.25 lakhs income his tax is nil. If his present income + income from Rs 2 lakhs in bank FD is below 2.25 lakhs - bank deposit is ideal. If he has a taxable income - he can invest in ARBITRAGE funds like J.M.Arbitrage / SBI Arbitrage Opportunities fund. He will get around 8 - 9% tax free income with minimum risk. If he is prepared for more risk than he can invest via SIP in balanced funds or lumpsum in MIPs. ...

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Lump Sum Investment during Retirement

Posted by : vsk_vijay

My uncle is around 65 yrs. Recently he has got a lump sum of Rs.2 lacs as arrears. Please suggest whether investing in land/FD/MF would be better.

If anyone would suggest a good financial planner it would be of great help. Please mail me to vsk_vijay@in.com

Thanks.

Lump Sum Investment during Retirement

Posted by : vsk_vijay

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My uncle is around 65 yrs. Recently he has got a lump sum of Rs.2 lacs as arrears. Please suggest whether investing in land/FD/MF would be better.

If anyone would suggest a good financial planner it would be of great help. Please mail me to vsk_vijay@in.com

Thanks....

Retirement

Posted by : sankara1970

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What could be ideal savings option at this inflation rate scenario and suitable for retirement stage.
...

Annuty--Need look

Posted by : gv

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Dear Ranjan,
Thaks for your views
I missed the tax angle,thanks again
GV...

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Annuty--Need look

Posted by : RANJAN

Deferred annuity is nothing but pension/ annuity at a later date. This is offered by insurance companies. I am against anybody investing in such schemes. Usually the returns from any insurance scheme are very low. By investing in such schemes - you are limiting your corpus at the time of retirement. Your pension depends only on two things -your corpus at retirement & immediate annuity rates at the time of retirement. The first one is in your hands . The second one is not. So the best thing you could do is create as big a corpus at retirement. Diversified equity funds is your best chance to create a big corpus.
One more point to be noted is that pension/ annuity received is taxable. If you invest equity funds and create a good corpus - the dividend amount you receive will be substantial. Incase it is enough for you - you could continue to stay invested and enjoy tax free dividend income.

Annuty--Need look

Posted by : RANJAN

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Deferred annuity is nothing but pension/ annuity at a later date. This is offered by insurance companies. I am against anybody investing in such schemes. Usually the returns from any insurance scheme are very low. By investing in such schemes - you are limiting your corpus at the time of retirement. Your pension depends only on two things -your corpus at retirement & immediate annuity rates at the time of retirement. The first one is in your hands . The second one is not. So the best thing you could do is create as big a corpus at retirement. Diversified equity funds is your best chance to create a big corpus.
One more point to be noted is that pension/ annuity received is taxable. If you invest equity funds and create a good corpus - the dividend amount you receive will be substantial. Incase it is enough for you - you could continue to stay invested and enjoy tax free dividend income. ...

In reply to:

Annuty--Need look

Posted by : RANJAN

Deferred annuity is nothing but pension/ annuity at a later date. This is offered by insurance companies. I am against anybody investing in such schemes. Usually the returns from any insurance scheme are very low. By investing in such schemes - you are limiting your corpus at the time of retirement. Your pension depends only on two things -your corpus at retirement & immediate annuity rates at the time of retirement. The first one is in your hands . The second one is not. So the best thing you could do is create as big a corpus at retirement. Diversified equity funds is your best chance to create a big corpus.
One more point to be noted is that pension/ annuity received is taxable. If you invest equity funds and create a good corpus - the dividend amount you receive will be substantial. Incase it is enough for you - you could continue to stay invested and enjoy tax free dividend income.