Nation pension System Calculator: The amount of pension in NPS is fixed on the basis of annuity, higher the amount of annuity, higher can be the pension.
NPS Scheme: National Pension System (NPS) is a better scheme for regular pension after retirement. NPS is a contributory investment scheme. If you invest regularly in this, then you can make a big retirement fund on retirement at the age of 60 years. Apart from this, monthly pension can also be arranged. The pension amount in NPS is fixed on the basis of the annuity, the higher the annuity amount, the higher the pension can be.
According to the NPS calculator, if a person starts investing in NPS with only Rs 4500 per month at the age of 25, then after retirement at the age of 60, he can get a pension of about Rs 51,000 per month. In this, the annuity will have to be kept at 60 percent. Let us understand this by calculation.
NPS Calculator: Understand Fund Calculation
- If the average age of the investor is 25 years. In this, he makes a monthly contribution of Rs 4,500. You have to invest till the age of 60 years i.e. till 35 years.
- Monthly investment in NPS: Rs 4,500 (Rs 54,000 per annum)
- Total contribution in 35 years: Rs 18.90 lakh
- Estimated return on investment: 10%
- Total amount on maturity: Rs 1.72 crore
- Annuity purchase: 60%
- Estimated annuity rate: 6%
- Age 60 Pension on: Rs 51,682 per month
(Note: This calculation is an approximate figure. Actual figures may vary.)
In NPS, if you take 60 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 68.90 lakh and 1.03 crore will go into annuity. From the annuity amount, you will get a pension of Rs 51,682 every month. The higher the annuity amount, the higher the pension you will get.
NPS: Required to buy 40% annuity
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amount invested under annuity is received in the form of pension after retirement and the balance amount of NPS can be withdrawn in a lump sum. In NPS, any citizen of India whose age is between 18 to 70 years can take part in this scheme after some necessary procedures.
What is NPS?
The National Pension Scheme (NPS) has been specially designed keeping in mind the post retirement financial needs. NPS was launched in January 2004 for government employees. In 2009, it was also opened for the private sector. 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. In this, any person can invest a fixed amount regularly. In NPS, any citizen of India whose age is between 18 to 70 years, can join this scheme after some necessary procedures.
How much guarantee of pension in NPS
NPS is a contribution based scheme. Talking about the guarantee of pension, there is no guarantee of pension after retirement in NPS. Actually, NPS is linked to the capital market. Therefore, there is no guarantee of profit in this. In this, pension fund managers registered by PFRDA invest your investments in equity, government securities and non-government securities besides fixed income instruments. However, in the long run, NPS acts as a wealth creation instrument. In this, higher returns are expected than investing in equity and debt.
