With the help of NPS Calculation, let us know that if you are 25 years old and invest Rs 10,000 every month, then what will be your estimated corpus at retirement in 60 years. Also, how much monthly pension can you get?
NPS Calculator: Private sector employees can also arrange pension for themselves after retirement. One of its cheapest and easiest option is National Pension System. The earlier you start investing in NPS, the more benefit you will get after retirement. First, you will get a chance to create a big retirement fund. Additionally, you can get a good amount as pension every month. However, there is no guarantee of any minimum pension on investment in NPS. This will depend on your annuity amount and the estimated returns on it. With the help of NPS Calculation, let us know that if you are 25 years old and invest Rs 10,000 every month, then what will be your estimated corpus at retirement in 60 years. Also, how much monthly pension can you get?
NPS Calculator: Monthly Pension on ₹10,000 Investment
Let’s say your plan is to retire at the age of 60. Your current age is 25 years and you invest Rs 10,000 every month in NPS. With the help of NPS Calculator of SBI Pension Fund, understand what will be the estimated fund and monthly pension on retirement.
- Monthly investment in NPS: ₹10,000
- Total contribution in 35 years: ₹42 lakh
- Estimated return on investment: 10%
- Total amount on maturity: ₹3.75 crore
- Annuity purchase: 40% (₹1.5 crore)
- Estimated annuity rate: 6%
- Age 60 Pension at: ₹74,958 per month
(Note: This calculation is an approximate figure. There may be a difference in the actual figure.)
If you take 40 per cent annuity in NPS (it is necessary to maintain this minimum) and the annuity rate is 6 per cent per annum, then after retirement you will get around Rs 2.25 crore in lump sum and Rs 1.5 crore will go into annuity. From this annuity amount, you will get a pension of about Rs 75 thousand every month. The more annuity amount you keep, the more pension you will get. The responsibility of investing the amount deposited in NPS is given by PFRDA to the registered pension fund managers. They invest your investments in equity, government securities and non-government securities as well as fixed income instruments.
Actually, annuity is a contract between you and the insurance company. According to this contract, it is necessary to buy annuity of at least 40 percent of the amount in the National Pension System (NPS). The higher this amount, the higher will be the pension amount. The amount invested under annuity is received as pension after retirement and the remaining amount of NPS can be withdrawn in lump sum.
NPS: Extra tax exemption in 80CCD(1B)
Two types of accounts can be opened in NPS, Tier 1 and Tier 2. In this, Tier 1 is pension account and Tier 2 is voluntary savings account. Any person can open Tier 1 account but Tier-2 account can be opened only if you have a Tier-1 account. The important thing here is that the tax exemption you get on contribution is available only on Tier-1 account.
Under NPS, the benefit of tax exemption is available on investments up to Rs 50 thousand under Section 80CCD(1B) of the Income Tax Act. If you have completed the limit of Rs 1.5 lakh under Section 80C, then NPS can also help you in extra tax savings. There is no tax on withdrawal of up to 60% of the amount on maturity of this scheme.
(Disclaimer: There is no guaranteed pension in NPS. Only a calculation is given here. Investment or annuity returns are approximate. Therefore, consult your advisor before starting any investment.)
