Government of India employees can opt for any of the benefits listed below, to plan their financial stability post retirement.
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Pension Scheme
It is a regular monthly payment made to employees after retirement, based on the number of years they have served the government. Under the Old Pension Scheme, the monthly payments were almost equivalent to 50% of the salary that employees drew the last time before their retirement. In the New Pension Scheme, the employees contribute 10% of their salaries, and 14% is contributed by the government.
Gratuity
A lump sum payment is made by the employees based on the number of years they have worked for the government.
Provident Fund
It is a retirement savings scheme where a certain portion of the employee’s salary is deducted every month and contributed to the provident fund. The government also contributes to the provident fund account. The employee can withdraw the amount after their retirement.
Employee’s Deposit Linked Insurance Scheme
The Indian government offers this scheme to provide financial security to the family of the employee in case of their untimely death. The government contributes to the insurance premium and the employee’s family gets the sum assured in case of the employee’s death.
Leave Encashment
The employees can accumulate their unused leaves and encash them at the time of their retirement. The government pays the employees for their unused leaves, which provides financial assistance to them during their retirement.
Over and above these schemes, it is important for every government employee to consider other private-source investment options that can provide them supplementary fixed monthly income post their retirement.
One such safe and assured return investment – is real estate – specifically small ticket size real estate in currently upcoming but fast developing areas, typically Guduvanchery, Sriperumbudur etc. These apartments can be bought through subvention schemes (10% down payment balance on possession etc), which ensure that home buying is not a financial burden. At the same time being fast growing industrial corridors, there is an excess demand for small ticket size apartment rentals in these areas and this is likely to grow steeply in the future. In fact, a lot of large multi nationals / corporate contract small ticket size homes in these areas for long periods. Hence there is an assurance of attractive monthly rental income from such investments
These added incomes can help government employees lead a comfortable life post retirement and also provide financial assistance to their families.