ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Federal income tax not immediately due on money put into a retirement account, or on the interest it makes.
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Income tax paid when money is withdrawn.
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Plans that help individuals set aside money to be used after they retire.
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Income after retirement is usually lower, so tax rate is lower.
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Double the interest if you do not withdraw it for at least 10 years.
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Detailed explanation-1: -Pension scheme gives an opportunity to invest and accumulate savings and get lump sum amount as regular income through annuity plan on retirement.
Detailed explanation-2: -Retirement Income: Retirement income can include social security benefits as well as any benefits from annuities, retirement or profit sharing plans, insurance contracts, IRAs, etc. Retirement income may be fully or partially taxable.
Detailed explanation-3: -Yes. The gratuity received on retirement is exempt under following conditions: (i) Any death-cum-retirement gratuity received under the revised Pension Rules of the Central Govt. or Central Civil Service Pension Rules, 1972.
Detailed explanation-4: -Employment based Pension Plans. Government Retirement Plans. Public Provident Fund. Pradhan Mantri Vay Vandna Yojna (PMVVY) Senior Citizen Saving Scheme (SCSS) Insurance based Retirement Plans.