The decision to choose it or not should be taken by the person only after analyzing his financial status. A person should keep some things in mind before taking a decision related to it.
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While doing financial planning, one should also give priority to retirement planning. One can manage all the goals through different loans. But after retirement, no loan will be available for the expenses. A product with little or no assured return over the long term does not exist. In such a situation, EPFO gives a very suitable and useful solution for retirement planning. Under the EPS scheme, the benefits of higher pension help the individual to meet the retirement expenses along with financial security. In this scheme, a person is helped to follow the rule of first saving and then spending.
Apart from this, it is a very attractive and beneficial scheme. The decision to choose it or not should be taken by the person only after analyzing his financial status. A person should keep some things in mind before taking a decision related to it. Let’s get to know them.
You may face liquidity issues
If you are not able to maintain the right cash flow, then excess contribution can lead to negative cash flow, which can lead to unwanted debt burden.
There will not be enough funds for additional returns
If you are good at managing finances and want to participate in India’s growth story, you may not have enough funds available to generate additional returns.
If planning to start own company
If you want to start your business and are planning for early retirement, then you may need extra money for your business. It may happen that it is not possible with this scheme.
One important thing that should be kept in mind. That is, the monthly pension is taxable. But the lump sum amount received after retirement is exempt from tax.
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