National Pension System is considered to be the best option for retirement planning, through which by investing a little, you can get a huge amount at the time of retirement. Let us know how to plan your investment if you want Rs 2.5 lakh per month for retirement.
If you are employed, you too must be worried about your retirement. This is the reason why people do retirement planning, but for this you have to think from now on how much money is needed and where to invest the money. It is also worth keeping in mind here that the sooner you start investing, the less you will have to invest every month. One of the best options for retirement planning is NPS (National Pension System), through which by investing a little, you will get a huge amount in retirement.
What is the formula?
First of all, it is important to understand that this formula is applicable to those youth who have just started their job. Suppose you want to deposit Rs 5 crore on retirement i.e. at the age of 60 and you have got a job before the age of 25. If you start saving Rs 442 from your salary every day from the age of 25 and invest it in NPS, then you will have Rs 5 crore at retirement.
How to make Rs 5 crore?
- If you save Rs 442 daily, it means you will have to deposit around Rs 13,260 every month. If you start investing from the age of 25, you will invest for 35 years till the age of 60. If you have invested this money in NPS, then you are likely to get an average interest of 10 percent. In this way, with compound interest, your money will become Rs 5.12 crore at the age of 60.
- 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 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 not only get interest on your principal amount every year, you will also get interest 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 a total interest of Rs 4.55 crore. In this way your total investment will be Rs 5.12 crore.
Will we get the full amount in our hands?
It would be wrong to say that you will have Rs 5.12 crore in your hands upon retirement. This is because when NPS matures after 60 years, you can withdraw only 60 percent of the amount. That means you will be able to withdraw around Rs 3 crore, while you will have to invest the remaining Rs 2 crore in an annuity plan. Let us tell you that thanks to this annuity plan, you will continue to get money throughout your life.
