NPS Retirement Planning: How you can get Rs 2 lakh monthly pension post retirement
NPS: If you are currently 30 years old and want to get a Rs 2 lakh monthly pension post retirement, then you need to know that you need to create a corpus of Rs 5 crore on retirement for that. NPS is a market-linked scheme but it can easily provide an average growth of 10 per cent per annum. In such a situation, if you invest around Rs 22,150 in NPS every month, then in 30 years, your money will become around Rs 5 crore at the rate of 10 per cent growth. This would be possible because of the power of compounding. Your total investment in these 30 years will be around Rs 79.74 lakh. You will get return of around Rs 4.21 crore on this.
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NPS: If you are 30 years old today...
Now if you are 30 years old today and want to have a similar lifestyle by doing nothing and subsisting on the monthly pension after 30 years, i.e. after retirement at the age of 60, at that time you will need 3-4 times the money as compared to today because of inflation.
NPS: If you are 30 years old today...
If you set a target of Rs 2 lakh monthly income post retirement, you need to know that how much money should you invest for that.
NPS: You will have 2 options on retirement
When you retire, you will have two options. Either you invest all your money in an annuity plan and start taking pension from it. Or withdraw 60 per cent of the amount and make an annuity plan with the remaining 40 per cent.
NPS: You will have 2 options on retirement
On retirement, at least 40 per cent of NPS has to be invested in an annuity plan. We are assuming that you invest your entire corpus in an annuity plan and get pension on it. Let us know how much corpus you will need in such a situation and how much money you need to invest every month for it.
NPS: First let us understand how much corpus will be required
If we look at the current FD rates, they remain around 6-7 per cent. NPS generally invest annuities of a retiree in a fixed income instrument, which we assume will provide you at least 5 per cent interest post retirement in the form of the monthly pension. If you get more interest, you will get more benefits.
NPS: First let us understand how much corpus will be required
In such a situation, if you need Rs 2 lakh every month, you need interest of Rs 24 lakh annually. If you want interest of Rs 24 lakh at the rate of 5 per cent, then for this, you should have a corpus of around Rs 5 crore. With this, you will get interest of about Rs 25 lakh at the rate of 5 per cent per annum.
NPS: How much should I invest to make Rs 5 crore?
If you are currently 30 years old and want to create a corpus of Rs 5 crore on retirement, you need to understand how much annual growth you need to achieve that target. An average growth of 10 per cent is easily available on NPS. In such a situation, if you invest around Rs 22,150 in NPS every month, then in 30 years your money will become around Rs 5 crore at the rate of 10 per cent growth per annum.
NPS: How much should I invest to make Rs 5 crore?
This would be possible because of the power of compounding. Your total investment in these 30 years will be around Rs 79.74 lakh. You will get growth of around Rs 4.21 crore on this. If you don't withdraw any amount and purchase annuity of the entire corpus and get a 5% return on it, you will draw a monthly pension of over Rs 2.10 lakh.