How much pension will I get from LIC?

The pension amount depends on the purchase price (investment amount), annuity option chosen, and age at vesting. Approximate annuity rates: for ₹10L investment at age 60, you can expect approximately ₹6,000-8,000 per month (7-9% annuity rate) depending on the plan and option. For ₹50L investment: approximately ₹30,000-40,000/month. These are approximate rates and actual rates depend on LIC's prevailing annuity rates at the time of purchase. Consult LIC for exact rates.

Which is the best LIC plan for retirement?

For retirement planning, a combination works best: (1) During working years (age 25-55): Buy Jeevan Anand or Jeevan Labh for guaranteed maturity corpus. (2) At retirement (age 58-60): Convert maturity proceeds into annuity via Jeevan Shanti or Saral Pension for monthly income. (3) Supplement with PPF, NPS, and EPF. Jeevan Umang (745) is unique — pays 8% SA annually after PPT + SA at age 100, providing lifelong income. Consult a financial advisor.

What is the difference between annuity and endowment for retirement?

Endowment plans (714, 715, 736) build a corpus — you get a lump sum at maturity which you can then invest for income. Annuity plans (850, 857, 862) convert a lump sum into guaranteed regular income (pension) for life. Strategy: Use endowment during working years to build corpus, then use annuity at retirement to convert corpus into monthly pension. Endowment gives flexibility; annuity gives guaranteed lifetime income. Consult a financial advisor.

When should I start planning for retirement?

Start as early as possible — ideally at age 25-30. Starting at 25 with ₹5,000/month gives approximately ₹1 Crore+ corpus by 60 (across LIC, PPF, and MF combined). Starting at 40, you need ₹15,000-20,000/month for the same corpus. The power of compounding makes early investment significantly more effective. A good retirement plan includes: EPF/PPF for guaranteed base, LIC endowment for insurance + savings, NPS for market-linked growth, and LIC annuity at retirement for pension. Consult a financial advisor.

LIC Pension Plans — Retirement Planning Guide (2026)

Q: What are LIC pension plans?

LIC pension plans (annuity plans) provide guaranteed monthly/quarterly/annual income after retirement. You invest a lump sum or pay regular premiums during your working years, and LIC pays you a guaranteed pension for life after the vesting age. Key plans include Jeevan Shanti (850), Saral Pension (862), and Jeevan Akshay (857). Jeevan Umang (745) also provides regular income (8% SA annually) though it is classified as a whole life plan.

Q: Is LIC pension taxable?

Yes, pension (annuity) income from LIC is fully taxable as per your income tax slab. Unlike maturity proceeds which are tax-free under Section 10(10D), pension income is treated as regular income. However, the premium paid towards pension plans qualifies for Section 80CCC deduction (up to ₹1.5L combined with 80C). NPS offers additional ₹50K deduction under 80CCD(1B). Consider tax implications when planning retirement. Consult a tax advisor.

✍️ By Team Lic Calculator 🔍 Reviewed by Haresh Hirapara (20+ yrs in Insurance) 📅 Updated: August 2026 ✅ Expert Verified

📌 Quick Answer

Two-phase strategy: (1) Working years: Build corpus with Jeevan Anand/Labh (maturity at 55-60). (2) At retirement: Convert to monthly pension via Jeevan Shanti or Saral Pension. For ₹50L corpus at age 60: approximately ₹30-40K/month guaranteed pension for life. These are approximate estimates.

📋 Table of Contents

The 2-Phase Retirement Strategy
LIC Pension Plans Compared
Annuity Options Explained
Worked Example — Monthly Pension
Complete Retirement Portfolio
Frequently Asked Questions

The 2-Phase Retirement Strategy

📈

Phase 1: Build Corpus

Age 25-55

Endowment / Jeevan Anand / Labh → Lump sum at maturity

→

💰

Phase 2: Monthly Pension

Age 55-60 onwards

Annuity plan → Guaranteed income for life

LIC Pension / Annuity Plans Compared

Feature	Jeevan Shanti (850)	Saral Pension (862)	Jeevan Umang (745)
Type	Annuity (deferred/immediate)	Annuity (immediate)	Whole Life + Income
Payment	Single / Regular	Single premium	Regular (15-30 yr PPT)
Pension Starts	Deferred or immediately	Immediately	After PPT
Pension Rate	~7-9% of purchase price	~6-8%	8% of SA annually ✅
Death Benefit	Depends on option	Purchase price returned	SA + Bonus ✅
Best For	Lump sum at retirement	Simple, guaranteed pension	Start early, lifelong income

*Approximate annuity rates. Actual rates vary by age, plan, and annuity option chosen. Check with LIC for current rates.

Annuity Options — Which to Choose?

A

Life Annuity (Pension for Life)

Highest pension amount. Pension stops on death — nothing returned to family. Best if you have other assets for family.

B

Life Annuity with Return of Purchase Price ⭐

Slightly lower pension. On death, full purchase price returned to nominee. Most popular option — you get pension AND family gets money back.

C

Joint Life Annuity

Pension for both spouses. After primary annuitant's death, spouse continues to receive pension. Good for couples.

D

Guaranteed Period (5/10/15/20 yr) + Life

Pension guaranteed for fixed period even if you die early. After guaranteed period, pension continues for life.

Worked Example — Monthly Pension

💰 How Much Pension from ₹50L Corpus?

Annuity Option	~Annual Rate	~Monthly Pension	On Death
Life Annuity Only	~9%	~₹37,500	Nothing
Life + Return of PP ⭐	~7.5%	~₹31,250	₹50L returned
Joint Life	~7%	~₹29,167	Spouse continues
10-yr Guaranteed + Life	~8%	~₹33,333	Min 10 yr guaranteed

*Approximate rates for age 60, ₹50L purchase price. Actual annuity rates vary by LIC's prevailing rates. Monthly pension = annual annuity / 12.

Complete Retirement Portfolio — The LIC Way

🎯 Recommended Portfolio (Start at Age 30)

Component	Monthly	Maturity/Corpus at 60	Purpose
LIC Jeevan Anand (₹15L SA)	~₹7,875	~₹30-33L	Guaranteed + lifelong cover
PPF (₹1.5L/year)	~₹12,500	~₹1.0-1.2Cr	Tax-free, guaranteed
EPF (employer)	Auto-deducted	~₹50-80L	Base retirement
NPS/MF SIP	~₹5,000	~₹50-70L	Growth component
TOTAL	~₹25,375/month	~₹2.3-2.8 Crore	₹1.5-2L/month pension

₹2.5Cr at age 60 → convert to annuity at 7.5% → approximately ₹1.56L/month pension for life. Plus EPF pension. These are approximate projections. Actual amounts depend on returns and LIC rates.

⚠️ Tax Note: Pension income from annuity is fully taxable under your income tax slab. Unlike LIC maturity which is tax-free (10(10D)), annuity pension is treated as regular income. Plan your tax strategy accordingly. PPF corpus withdrawal is tax-free. Consult a tax advisor.

💡 Expert Tip (Haresh Hirapara): Most people make the mistake of buying only LIC endowment for retirement — the maturity gives a lump sum, but no regular income. My recommended strategy: (1) Age 25-30: Start Jeevan Anand/Labh + PPF — these build your corpus. (2) Age 55-60: Convert LIC maturity + PPF withdrawal into Jeevan Shanti or Saral Pension for guaranteed monthly income. (3) Choose the "Life Annuity with Return of Purchase Price" option — you get pension AND your family gets the money back on your death. Also, don't forget Jeevan Umang (745) if you start early — 8% of SA every year after PPT is like a built-in pension. Consult a financial advisor for a personalised retirement plan.

Frequently Asked Questions

What are LIC pension plans?+

Annuity plans that provide guaranteed monthly income for life after retirement. Key plans: Jeevan Shanti (850), Saral Pension (862), Jeevan Akshay (857). Also Jeevan Umang (745) for regular income. You invest lump sum or regular premium, LIC pays pension for life.

How much pension from ₹50L?+

Approximately ₹30,000-37,500/month depending on annuity option. Life only: ~₹37.5K. Life + return of PP: ~₹31.25K. These are approximate for age 60. Actual rates depend on LIC's prevailing annuity rates. Consult LIC for exact quotes.

Best LIC plan for retirement?+

Combination: Jeevan Anand/Labh during working years (build corpus) → Jeevan Shanti/Saral Pension at retirement (convert to monthly income). Or Jeevan Umang (745) for built-in 8% annual payout. See our Best Plan by Age. Consult a financial advisor.

Annuity vs endowment for retirement?+

Endowment builds corpus (lump sum). Annuity converts corpus into regular income. Use endowment during working years, annuity at retirement. Endowment = savings phase. Annuity = income phase. Consult a financial advisor.

Is LIC pension taxable?+

Yes, pension income is fully taxable under your income tax slab. Unlike maturity (tax-free under 10(10D)). Premium qualifies for 80CCC deduction. NPS has extra 80CCD(1B) benefit. Plan tax strategy carefully. Consult a tax advisor.

When to start retirement planning?+

Age 25-30. Starting at 25 with ₹5K/month → ~₹1Cr+ by 60. Starting at 40 needs ₹15-20K/month for the same. Power of compounding makes early start critical. Combine EPF + PPF + LIC + NPS. Consult a financial advisor.

⚠️ Disclaimer

This article is for educational and informational purposes only. LIC-Calculator.com is not affiliated with LIC of India. Pension rates, annuity amounts, and retirement projections are approximate based on publicly available information. Actual annuity rates depend on LIC's prevailing rates at the time of purchase. For official information, visit licindia.in.

This is not financial advice. Please consult a certified financial advisor for personalised retirement planning.

📚 Related Resources

🎯 Best Plan by Age ♾️ Jeevan Umang Guide ⚖️ LIC vs PPF vs FD 💵 Tax Benefits Guide

LIC Pension Plans Retirement Planning Guide