NPS Calculation- The National Pension System (NPS), regulated by the PFRDA or Pension Fund Regulatory and Development Authority under the PFRDA Act of 2013, is an investment scheme designed for pension after retirement. Under the NPS, investors’ savings are deposited into a pension fund. The investors’ money is invested in a diversified portfolio of government bonds, bills, corporate debentures, and shares by professionally managed funds regulated by the PFRDA.

Small savings will make life tension free

National Pension Scheme is a retirement scheme in which if you start investing early and contribute small amounts, you can arrange for adequate pension and corpus for retirement. Any Indian citizen (government employee or private sector employee) between the ages of 18 and 70 can open an account in this. NRIs are also eligible for this. After opening the account, you have to contribute till the age of 60 or till maturity. At least 20 years of investment is required in this.

NPS: Build a retirement corpus first
Age at which you start investing: 21 years
Investment period: 40 years (till age 61)
Investment in NPS every month: Rs 1,000
Top-up in NPS every year: 10%
Total investment in 40 years: Rs 53,11,111
Estimated return on investment: 12% annually
Total corpus at retirement: Rs 3,50,44,023 (Rs 3.51 crore)
Total benefit: Rs 2,97,32,913 (Rs 2.97 crore) .

How much do you need to invest if you want a pension of Rs 1 lakh?

According to the NPS calculator, if you start investing in NPS at the age of 21, you will have to invest Rs 1000 every month for the next 40 years. You will have to buy annuity for pension. You will have to invest 50% of the total corpus in annuity plan. At the same time, keep the estimated return on investment at 12% per annum, the total corpus on retirement will be Rs 3,50,44,023 (Rs 3.51 crore). Your pension wealth will be Rs 1,75,22,012 i.e. (Rs 1.75 crore). In this case, the monthly pension will be Rs 1,16,800.

If an employee invests in NPS, he will not have to pay any tax on annual income up to Rs 13.7 lakh. According to the new tax slab, there is no tax on income up to Rs 12 lakh. At the same time, there is an additional rebate on 14% NPS contribution. In such a situation, if your salary is up to Rs 13.7 lakh annually. If you invest in NPS, you will not have to pay tax.

Who can open an account in NPS?

Any Indian citizen can open an NPS account. For this, his age should be between 18 years to 70 years. Salaried people, businessmen, freelancers, self-employed people can also join it.

What documents are required to open an NPS account?

Aadhar card
PAN card
Voter ID for residential proof
Bank Account
Passport size photo
Active mobile number and email ID

How does one get pension?

A person investing in this scheme deposits a fixed amount every month or year. This money is invested in the stock market, government bonds and other financial instruments by professional fund managers. When the investor reaches the age of 60, he gets a part of the deposited amount as lump sum. He gets pension every month from the remaining amount.

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