NPS Calculation: If you have delayed retirement planning and your age is around 35 years, there is still an option to invest in NPS. Let us understand with a calculation how much you will have to invest for 50 thousand monthly pension.
NPS Calculator: To maintain a comfortable life after retirement, it is necessary that you remain financially independent. For this it is necessary that you keep getting regular income every month. Therefore, retirement planning should also be started from the initial days of the job. So that you can build a substantial retirement corpus in the long run.
National Pension System is a better scheme to get pension every month along with retirement fund. If you have delayed retirement planning and have reached 35 years of age, there is still an option to invest in NPS. Let us understand with a calculation how much you will have to invest for 50 thousand monthly pension.
NPS Calculator: Understand Fund Calculation
- If the average age of the investor is 35 years. In this, he makes a monthly contribution of Rs 15,000. In this, the investor will have to invest till the age of 60 years i.e. for 25 years.
- Monthly investment in NPS: Rs 15,000
- Total contribution in 25 years: Rs 45 lakh
- Estimated return on investment: 10%
- Total amount on maturity: Rs 2 crore
- Annuity purchase: 50%
- Estimated annuity rate: 6%
- Pension at age 60: Rs 50,171 Month
(Note: This calculation has been done using the NPS Trust Calculator. This is an approximate figure. Actual figures may vary.)
1 crore lump sum
In NPS, if you take 50 per cent annuity (minimum 40 per cent is required) and the annuity rate is 6 per cent per annum, then after retirement you will get a lump sum of Rs 1.0 crore and 1 crore will go into annuity. Now from this annuity amount, you will get a pension of Rs 50,171 every month. The higher the annuity amount, the higher the pension you will get.
Actually, annuity is a contract between you and the insurance company. Under this contract, it is necessary to buy an annuity of at least 40 percent of the amount in the National Pension System (NPS). The higher the amount, the higher will be the pension amount. The amount invested under annuity is received in the form of pension after retirement and the balance amount of NPS can be withdrawn in a lump sum.
NPS: Who can invest
In NPS, any citizen of India whose age is between 18 to 70 years, can take part in this scheme after some necessary procedures. The responsibility of investing the amount deposited in NPS is given to the pension fund managers registered by PFRDA. They invest your investments in equity, government securities and non-government securities apart from fixed income instruments.
Under NPS, under section 80CCD(1B) of the Income Tax Act, the benefit of tax exemption is available on investments up to Rs 50,000. NPS can also help you in additional tax savings if you have completed the limit up to Rs 1.5 lakh under Section 80C. Withdrawal up to 60 percent of the amount on maturity of this plan is not taxed.
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