NPS: To subscribe to NPS scheme at the age of 30 and get a monthly pension of Rs 2 lakh on retirement after 30 years, how much investment will be required every month from now, read the calculation here.
NPS Calculator: With the increase in inflation rate, the value of money is decreasing. Amidst these concerns, investors who want a big retirement fund must be wondering how much money they need to invest in which scheme to get a monthly pension of Rs 2 lakh? National Pension System i.e. NPS is a cost-effective investment option to create a big retirement fund. Investment in this gives a rebate of up to 2 lakhs under various sections of Income Tax. NPS is a saving-cum-retirement scheme, which is available to both government employees and common people.
If you invest in NPS or are thinking of investing money in this scheme to get a monthly pension of 2 lakhs on retirement, then here you can understand from the example how much you have to invest every month after subscribing?
How much to invest in NPS for a monthly pension of 2 lakhs?
For a pension of Rs 2 lakh every month after retirement from NPS investment, take a look at the calculation given below.
NPS: How to get a monthly pension of Rs 2 lakh
Suppose a person started investing in NPS at the age of 30. He put Rs 25,000 every month from his savings in the NPS account. He continued doing this for the next 30 years. During this period, the deposit got an average annual return of 10 percent. The total estimated retirement corpus on completion of 60 years of age is becoming Rs 5.69 crore. Understand the calculation below.
Age to start investing in NPS: 30 years
Monthly investment in NPS: Rs 25,000
Total investment in 30 years: Rs 90 lakh
Estimated return on investment: 10 percent per annum
Total corpus after 30 years: Rs 5,69,83,134 (Rs 5.69 crore)
If a person subscribes to NPS scheme at the age of 30 and keeps investing Rs 25,000 every month in it, if the estimated return on the deposit in the scheme is 10 percent per annum, then after 30 years the total pension wealth will be around Rs 5.69 crore. It is worth mentioning that those investing in NPS are required to buy annuity with at least 40 percent of the share. In such a situation, if a person buys 55 percent annuity then
Investment in annuity plan: 55 per cent
Annuity return: 8 per cent
Lump sum value: Rs 3,13,40,724 (3.13 crores)
Monthly pension: Rs 2,08,938 (more than Rs 2 lakhs)
(Note: NPS Trust’s calculator has been used in the calculation.)
By planning in this way, you or anyone can get a monthly pension of Rs 2 lakh on retirement.
Who can invest in NPS?
National Pension System is a pension scheme of the Central Government, in which investment is made keeping retirement in mind. Any Indian citizen (government employee or private sector employee) between the age of 18 to 70 years can open an account in the National Pension System. NRIs are also eligible for this. After opening the account, one has to contribute till the age of 60 or till maturity i.e. 70 years. If we look at the return history of NPS, till now it has given 8% to 12% annual return.
What are the benefits of NPS?
It is a better investment option to build a big retirement fund.
It offers tax exemption on investment up to Rs 1.5 lakh in a year under Section 80C of Income Tax and Rs 50,000 separately under Section 80CCD (1B), i.e. a total of Rs 2 lakh.
Flexible investment modes meet diverse investor preferences.
Portability is a very special feature that allows investors to transfer funds according to job and location.
Regulated and transparent management under the supervision of PFRDA.
There is a facility to manage the fund at low cost and the benefit of compounded returns is also available in NPS.
It is very easy to monitor. There is online access to easily manage and monitor the fund.
