Retirement Planning: How to save for your retirement

economictimes.indiatimes.com:

Government employees can rely on their pensions for post-retirement income, to an extent at least. Others have to build their own retirement money kitty. For many in the private sector, a portion of their salary is directed toward the Employees' Provident Fund (EPF).

However, depending solely on your EPF contribution for post-retirement earnings is not a good idea. So, if you want to know how much to save for retirement, read on. Before we tell you how to save, here is a look at the different options one has to save for their retirement.EPF and pension In 2004, the government transitioned from defined benefit (DB) to defined contribution (DC) pension for all employees joining from January 2004 (excluding defence services).

Those who entered service prior to 2004 would continue to get pension in the form of DB. Further, government employees need to mandatorily contribute toward the National Pension System (NPS). «National Pension System (NPS) is a voluntary retirement savings scheme laid out to allow the subscribers to make defined contribution towards planned savings.

At the time of normal exit from NPS, the subscribers may use the accumulated pension wealth under the scheme to purchase a life annuity from a PFRDA-empaneled life insurance company apart from withdrawing a part of the accumulated pension wealth as lump-sum, if they choose so. PFRDA is the nodal agency for implementation and monitoring of NPS,» stated the Indian Post website. For private sector employees contributing to NPS is optional, contributions to the Employees' Provident Fund (EPF) is mandatory.