During our service period, we have a stable source of income. But after the age of 60 when we retire, we need to make some arrangements to get a decent amount of money to lead a mundane life. That’s why we have pension funds. So, what is a pension fund? I will explain the pension fund meaning below.
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Pension funds are known as retirement funds. It is a type of savings scheme where after joining an organisation as an employee invest a small amount of salary into a designated saving plan. The primary purpose of the pension fund is to get a steady flow of money after you retire.
Since there is steady inflation all around the world, without pension funds it will be very difficult to survive. Even though you have a decent amount in your bank account you still may need to opt for pension funds because of an emergency.
A pension fund can come and save the day when you have no other income source to support your family.
In India, pensions can be divided into two parts. The first part is when you invest or pay for a scheme throughout the service period until you retire and the second part begins after the retirement when you start receiving the annuities till death.
Types of Pension Funds in India:There are different types of pension plans you can invest in such as NPS, Employee Provident Fund, Deferred Annuity, and Immediate Annuity to name a few. You can go to your bank branch and ask the bank authorities to help you invest in these schemes.
Benefits of Pension Funds:Pension is a long-term saving goal.
The pension funds help in emergency situations.
It creates an annuity that can help you get a steady return after retirement.
The pension can help a nominee after the death of the investor.
It helps to avoid the effect of inflation and provides inflation-adjusted returns.
I hope you know what is a pension fund meaning now.
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What is a pension fund?
sanjukta
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2022-08-22T11:06:35+00:00 2022-08-22T11:06:36+00:00Comment
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