look news india
Many people do retirement planning, but most of the people get their timing wrong. For retirement planning, you have to think not in old age, but in youth. You have to think about how much money is needed and where to invest the money, so that you get strong returns. Keep in mind that the earlier you start investing, the less you will have to invest every month and the higher the returns you will get. The best option for retirement planning is NPS (National Pension System), in which by investing little by little you can accumulate Rs 5 crore by retirement (How to get Rs 5 crore at retirement). Let us know how you can get a pension of Rs 2.5 lakh on retirement.
What is the formula for depositing Rs 5 crore?
First of all you have to understand that this formula does not apply to everyone. This formula will be applicable only to those youth who have recently started employment. Suppose you want to save Rs 5 crore for retirement i.e. at the age of 60 and you get a job before the age of 25. If you start saving Rs 442 every day from your salary from the age of 25 and invest it in NPS, then you will easily have Rs 5 crore at retirement.
How will Rs 442 per day become Rs 5 crore?
If you save Rs 442 every day, it means you will have to deposit around Rs 13,260 every month. If you start investing at the age of 25, you will invest for 35 years till the age of 60. If you have invested this money in NPS, you will get an average interest of 10 percent there. In this way, after getting compound interest, your money will become Rs 5.12 crore at the age of 60.
This will happen through the power of compound interest
If you invest Rs 13,260 every month in NPS, then in 35 years you will invest a total of Rs 56,70,200. Now the question arises that if the investment is of Rs 56.70 lakh then where will the Rs 5 crore come from. Actually this will be possible with the power of compounding. Under this, you will get interest every year not only on your principal amount but also on the interest received on that principal amount. In such a situation, when you deposit Rs 56.70 lakh for 35 years, you will have received interest of Rs 4.55 crore. In this way your total investment will be Rs 5.12 crore.
Will you have Rs 5.12 crore at the time of retirement?
It would be wrong to say that you will have Rs 5.12 crore in your hand upon retirement. This is because when NPS matures after 60 years, you will be able to withdraw only 60 percent of the amount. That means you will be able to withdraw around Rs 3 crore, while the remaining Rs 2 crore will have to be invested in an annuity plan. Let us tell you that because of this annuity plan, you will continue to get money throughout your life.
Can you withdraw money before retirement?
NPS matures only when you turn 60 years of age. In such a situation, you cannot withdraw NPS money before 60 years. However, if you have any emergency or illness, some amount can be withdrawn for construction of a house or children's education. Keep in mind that the rules for withdrawing money can be changed anytime, so read the rules of NPS before withdrawing money. By the way, you should always try to withdraw NPS money only after retirement, so that you can spend your old age comfortably.
You will get around Rs 2.5 lakh every month
If you invest your entire amount in an annuity plan, you will get a lot of money every month. Let us assume that you will easily get an interest rate of 5-6 percent. In such a situation, on Rs 5.12 crore, you will get Rs 25.60- 30.72 lakh annually. That means every month you will get Rs 2.13-2.56 lakh as salary.
