By Bizz Impact
Family pension is a financial benefit provided to the family of a government employee after their demise. The family pension can be paid to the surviving dependents, and its calculation depends on whether the pensioner has passed away during service or after retirement. It can act as a steady income source for the surviving dependents and ensure some level of financial stability. However, the amount received through family pension may not always be enough to cover long-term expenses. That is why it is essential to explore additional retirement options such as a guaranteed pension plan or plan your savings better using a pension plan calculator. What is Family Pension? Family pension is a monthly payment made to the eligible family members of a deceased government employee or pensioner. It is granted to the spouse and, in certain cases, to children, dependent parents, or disabled siblings of the deceased. The aim is to help the dependents financially after the breadwinner has passed away. The person/s eligible to receive the pension include: Spouse (wife or husband) Unmarried sons below 25 years of age Unmarried, divorced, or widowed daughters Dependent parents or disabled siblings (if no spouse or children survive) Family pension is governed by government rules and applies to employees who joined service in pensionable roles and fall under the Family Pension Scheme for Central Government Employees, 1964. How is Family Pension Calculated? While you can use a pension plan calculator to make your retirement planning more effective, the calculation of family pension is strictly based on government rules. There are two ways to go about it: Enhanced Rate: If the employee dies while in service after at least 7 years of service, the family receives 50% of the last drawn basic pay for 10 years. If the employee passes away after retirement, this amount is payable for 7 years or until the age of 67, whichever is earlier. Normal Rate: Beyond the enhanced period, the pension is calculated at 30% of the last drawn basic salary. The pension amount is rounded up to the nearest rupee and is subject to a maximum limit. If you are planning your financial future, using a pension plan calculator can help determine the gap between this amount and your actual retirement needs. You can then research and opt for the best pension plan in India that meets your needs beyond the family pension amount. Need for Other Pension Plans While family pension provides financial relief, it may fall short of taking care of all living costs. This is especially relevant in the long term. That is why it may be a good idea to opt for a pension plan from a private provider. Opting for a guaranteed pension plan ensures a fixed income for life and can help you complement the family pension. You can use a pension plan calculator to estimate how much more you will need post-retirement. By researching and investing in the best pension plan in India, you can ensure you have enough funds to take care of rising expenses, health emergencies, or supporting dependent family members. These plans are essential for building a sustainable financial cushion beyond government benefits. Family pension offers financial support to dependents after a government employee’s demise. However, it may not always suffice. That is why supplementing it with a guaranteed pension plan can ensure comprehensive financial security for your family. Planning ahead always pays off. (No Times Now Journalists are involved in creation of this article.)