The National Pension Scheme (NPS) for Traders offers eligible shopkeepers and self-employed persons an assured ₹3,000 monthly pension after 60. But with inflation and retirement expenses rising, is this enough?
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Under the National Pension Scheme (NPS) for Traders, shopkeepers, retail traders, and self-employed people get an assured pension of ₹3,000 a month after attaining 60 years.
This voluntary scheme covers Vyaparis such as shop owners, retail traders, rice and oil mill owners, workshop owners, commission agents, real estate brokers, and owners of small hotels and restaurants, among others, with an annual turnover of up to ₹1.5 crore.
If the beneficiary dies, the spouse is entitled to 50% of the pension as family pension. But is ₹3,000 a month enough for retirement, and can traders depend on this scheme alone? Here’s what experts have to say.
Can traders depend on the ₹3,000 pension alone?
No. The pension is inadequate on its own because it is a fixed amount with no inflation adjustment, said Vijay Kuppa, CEO, InCred Money.
“It barely covers groceries, utilities, rent, healthcare and emergencies that a retirement income should cover,” he added.
Manish P. Hingar, Founder and Chief Executive Officer of Fintoo, said this NPS scheme should be viewed as a small base for retirement planning. The ₹3,000 pension does not increase with inflation. At 6% inflation, ₹3,000 received 25 years from now would be worth only about ₹700 in today's money.
There is also no lump-sum payout at 60. If the member dies, the spouse receives 50% of the pension, or ₹1,500 a month. Children are not covered in this scheme, Hingar said.
Who should consider the NPS for Traders scheme?
This NPS scheme can be considered by people with irregular incomes or those who struggle to save regularly. It is aimed at small traders and self-employed people in the unorganised sector who are not income-tax assessees, Kuppa mentioned.
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