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Retirement Planning through NPS: Want Rs 2,00,000 monthly pension from Rs 5,000 starting monthly contribution? Know how it can be achieved
- Written by Bhawna Gupta
Published: Zee Business| Updated: Zee Business
NPS or national pension scheme is a government-backed pension scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). NPS supports financial security in one's working years by enabling individuals to save consistently throughout their services and accumulate a significant retirement fund over time. While retiring from work, NPS provides a combination of one-time lump sum payouts and periodic income.
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Eligibility
1/10The NPS scheme is available for the Indian citizens between 18 years of age to 70 years.
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NPS: Tax benefits
2/10Contributions under NPS are tax deductible under subsection 80CCD (1B) of the Income Tax Act. This is over an above the deduction of Rs 1.5 lakh available under section 80C.
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NPS account transfer
3/10The NPS subscribers are eligible to transfer account across jobs, locations and sectors.
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Flexibility
4/10You can choose your fund manager and asset allocation based on your risk appetite.
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Annuity options
5/10Once retired, invest at least 40 per cent of the corpus into annuities to get a pension.
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NPS partial withdrawal
6/10You can withdraw your money partially for children's education, purchasing home, or medical emergencies.
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How to get more than Rs 2,00,000 pension every month through NPS?
7/10Suppose you start investing Rs 5,000 per month at 25 years of age. You continue this investment for 60 years. Then you will be able to withdraw a monthly pension of Rs 2,00,339 per month.
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What will be annuity purchase?
8/10The estimated annuity value is Rs 3,00,50,790
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Lump sum withdrawal
9/10The estimated lump sum withdrawal amount will be Rs 53,03,081.
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Check calculations
10/10Total investment in 35 years: Rs 66,86,087 Total corpus: 3,53,53,870 Annuity amount: Rs 3,00,50,790 (invested 85% in annuity) Rate of annuity: 8% Annual increase in contribution: 6% Expected rate of return on investment: 10% Expected pension amount: Rs 2,00,339 per month
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