National Pension System (NPS), Pradhan Mantri Vaya Vandana Yojana (PMVVY), Public Provident Fund (PPF) and Senior Citizen Savings Scheme (SCSS) are some of the tools available today for earning a pension after your retirement. Retirement planning is often neglected by individuals. For something as inevitable as retirement, planning well in advance leads to a steady flow of income during post-retirement years, say financial planners. But which one to pick from the various instruments focused on retirement available today? Is an annuity plan better than investing in a pension scheme? Investors may look at the best suited option based on requirement, investment period and the ability to absorb volatility, say experts. (Also read: How To Invest In Atal Pension Scheme (APY) To Earn Pension of Rs 5,000 Per Month)
In an annuity plan, you pay a lump sum and start receiving regular income for life or a pre-defined fixed period. A pension plan, on the other hand, provides you with the opportunity to accumulate your savings in the years towards retirement.