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NPS Calculator: With the increase in inflation rate, the value of money is decreasing. Amidst these concerns, investors seeking a big retirement fund may be wondering how much money they will have to invest in which scheme to get a monthly pension of Rs 2 lakh? National Pension System or NPS is an affordable investment option to build a large retirement fund. Investing in this gives exemption of up to Rs 2 lakh under various sections of income tax. NPS is a savings-cum-retirement scheme, available to both government employees and common people.
If you invest in NPS or are thinking of investing money in this scheme to get Rs 2 lakh monthly pension on retirement, then here you can understand with example how much you will have to invest every month after subscribing?
How much should one invest in NPS for a monthly pension of Rs 2 lakh?
Take a look at the calculations given below for a pension of Rs 2 lakh every month after retirement from NPS investments.
NPS: How to get Rs 2 lakh monthly pension
Suppose a person started investing in NPS at the age of 30. He deposited Rs 25,000 every month from his savings into the NPS account. He continued to do so for the next 30 years. During this period, an average annual return on deposits was 10 percent. The total estimated retirement corpus on completion of 60 years of age is Rs 5.69 crore. Understand the calculation below.
Age to start investing in NPS: 30 years
Monthly investment in NPS: Rs 25,000
Total investment in 30 years: Rs 90 lakh
Estimated return on investment: 10 percent per annum
Total amount after 30 years: Rs 5,69,83,134 (Rs 5.69 crore)
If a person subscribes to the NPS scheme at the age of 30 and keeps investing Rs 25,000 every month, then if the expected return on the amount deposited in the scheme is 10 per cent per annum, then the total pension wealth after 30 years will be around Rs 5.69 crore. . It is noteworthy that those investing in NPS are required to buy annuity with at least 40 per cent stake. In such a situation, if a person buys an annuity of 55 percent, then
Investment in annuity plan: 55 percent
Annuity return: 8 percent
Outright Price: Rs 3,13,40,724 (3.13 crore)
Monthly pension: Rs 2,08,938 (above Rs 2 lakh)
(Note: NPS Trust's calculator has been used in the calculations.)
By planning in this way, you or any person can get a monthly pension of Rs 2 lakh on retirement.
Who can invest in NPS?
National Pension System is a pension scheme of the Central Government, in which investments are made keeping retirement in mind. Any Indian citizen (government employee or private sector employee) between the age of 18 to 70 years can open an account in the National Pension System. NRIs are also eligible for this. After opening the account, contribution has to be made till the age of 60 years or maturity i.e. 70 years. If we look at the return history of NPS, till now it has given 8% to 12% annual returns.
What are the benefits of NPS?
It is a better investment option to build a large retirement fund.
In this, under Section 80C of Income Tax, tax exemption is available on investment up to Rs 1.5 lakh in a year and under Section 80CCD (1B), tax exemption is available on investment up to Rs 50,000 i.e. a total of Rs 2 lakh.
Flexible investment modes cater to diverse investor preferences.
Portability is a very special feature that allows investors to transfer funds as per the job and location.
Regulated and transparent management under the supervision of PFRDA.
NPS provides the facility of fund management at low cost and also offers the benefit of compound returns.
It is very easy to monitor. Online facility is available to manage and monitor the fund easily.