APY

Full form: Atal Pension Yojana

Retirement

Atal Pension Yojana is a government pension scheme for unorganised sector workers (18-40 years). Guarantees a fixed monthly pension of Rs 1,000-5,000 at age 60, depending on contribution amount. Government co-contributed 50% of total contribution for eligible subscribers for initial years.

In detail

APY pension options:nRs 1,000/month pension at 60: if joining at 18, contribute Rs 42/month. At 30: Rs 116/month. At 40: Rs 291/month.nRs 3,000/month: at 18 = Rs 126/month; at 30 = Rs 347/month; at 40 = Rs 873/month.nRs 5,000/month: at 18 = Rs 210/month; at 30 = Rs 577/month; at 40 = Rs 1,454/month.nnEligibility: Indian citizen, 18-40 years, savings bank account. Not eligible if income taxpayer (since October 2022 -- taxpayers excluded).nnPension fund: PFRDA manages APY corpus. On death: spouse continues pension; on both dying, corpus given to nominee.

Formula

Contributions increase significantly with age at entry -- start early to minimise contributionnRs 5,000/month pension corpus required: approximately Rs 85L (managed by PFRDA)

Real-life example

🇮🇳 India example

Ramesh, 28, unorganised sector worker, joins APY for Rs 3,000/month pension. Monthly contribution: Rs 292. By 60: receives Rs 3,000 guaranteed every month for life. His wife (if she survives him) continues to receive Rs 3,000/month. Both die: their nominee gets Rs 5.1L corpus. Rs 292/month for guaranteed lifetime pension is exceptional value.

Frequently asked questions

Can I have both APY and NPS? ▼

You cannot be an income tax payer and also contribute to APY (since October 2022). If you pay income tax: only NPS. If below taxable income: APY. Both were available simultaneously before October 2022.