Overview Annuity plan selection is crucial for NPS investors in order to prevent large income loss. On an investment of Rs 50 lakh spread over 30 years, losses of up to Rs 21 lakh can be avoided by comparing annuity rates from several suppliers. Higher returns are provided by annuities without return of purchase price (ROP), whereas heirs gain from those with ROP.
More than fifteen years have passed since the NPS became accessible to all citizens. A large number of people who began investing in NPS in their 40s may be getting close to retirement. You are unable to invest 40% of your NPS corpus in any other product since it must be used in an annuity plan.Therefore, it is preferable to take full advantage of the many annuity options offered by NPS.
However, before choosing a plan, do make it a point to compare all the annuity prices. The remaining 60% of the NPS can always be used to make investments in goods that will yield a larger profit for you.
You might be better off choosing a plan without ROP if you require a higher monthly income. This is appropriate for those who want to provide their legal successors no financial inheritance.
Furthermore, annuities without ROP are an option for those who need a bigger income from annuities but already have other assets to leave to their loved ones. However, it is preferable to continue with an annuity plan with ROP if you have other reliable sources of income in retirement and would like to leave your loved ones with a portion of your NPS purchase price savings.
