NPS Pension- Employees working in the private sector can also arrange for pension for financial security after retirement. For this, the National Pension System (NPS) is a cheap and easy option. If investment in NPS is started early, a large fund can be created at the time of retirement. This will not only secure the future but will also ensure financial independence.
If you start investing Rs 10,000 every month in NPS at the age of 25, how big a fund can you have by the age of 60? Also, how much pension can you get every month from this investment? However, there is no guarantee of minimum pension in NPS, because it completely depends on your investment and the returns you get on it. Let’s know the complete information.
How much pension will you get on investing Rs 10,000 per month?
If you are planning to invest in the National Pension System (NPS) and you are 25 years old, then investing Rs 10,000 every month till the age of 60 can give you a good fund at the time of retirement. This scheme can be beneficial for those investors who want to make a secure financial plan for their retirement. Let us understand how much fund will be created in a period of 35 years and how much pension you will get.
Under NPS, if you invest Rs 10,000 every month, then your total contribution will be Rs 42 lakh in 35 years. If you get an annual return of 9% on this, then your invested amount will increase to Rs 2.96 crore. At the time of retirement, you can withdraw 40% of this fund i.e. Rs 1.18 crore in lump sum, while the remaining 60% i.e. Rs 1.78 crore will be invested in annuity. With this annuity, you will get about Rs 88,915 every month as pension.
NPS Pension Calculation Formula
Like other pension schemes, NPS also calculates returns on the basis of compounding interest .
The NPS calculator uses the following formula:
A=P(1+r/n)^n
In this formula:
A = Maturity Amount
P = Principal Sum
r = Rate of Interest Per Annum
n = Number of Times Interest Compounds in a Year
t = Total Tenure in Years