NPS Retirement Planning: Nowadays, everyone is investing to secure their future and that of their families. It’s crucial to plan to maintain financial stability after retirement. Choosing the right investment option is essential to ensure a regular income even after retirement. The National Pension System (NPS) is one such scheme, where even small savings can create a substantial corpus over the long term.

If you start investing at age 30

Suppose you’re 30 and deposit ₹5,000 per month into NPS. This amounts to ₹60,000 annually. If you continue this investment for 30 years, your total investment will be ₹1.8 million.

How Compounding Grows Funds

Assuming you earn an average annual return of 10% from NPS, your total corpus at retirement could reach approximately ₹1.13 crore. This means your ₹18 lakh investment will generate interest of approximately ₹95.96 lakh. This is the true power of compounding, which multiplies money over time.

Read Here: Bhojpuri Song – Nirahua & Aamrapali Dubey New Suhagrat Track “Senurwa Mahan” Crossed 248+K Views Instantly, Must Watch

Two Options at Retirement

You have two options at retirement. The first option is to start your pension by taking out an annuity plan with the entire corpus. The second option is to withdraw 60% of the total corpus and invest the remaining 40% in an annuity plan. NPS rules require at least 40% of the corpus to be invested in an annuity.

Find out how much pension you will receive

If your total corpus is ₹1.13 crore and you invest 40% of it, or ₹45.58 lakh, in annuity, you could receive an annual pension of approximately ₹3.19 lakh to ₹3.64 lakh, depending on the annuity rate. This means you will receive a monthly pension of approximately ₹26,500 to ₹30,400.

Some people prefer to invest the entire corpus in an annuity to earn a higher pension. If the entire ₹1.13 crore is invested in annuity, the annual pension could reach ₹7.97 lakh to ₹9.11 lakh. This translates to approximately ₹66,000 to ₹76,000 per month, providing a comfortable income after retirement.

Read Here: Bank of India Cuts Loan Rates-Check How Much Your Home Loan EMI Will Reduce

Keep these things in mind

This calculation is based on the current circumstances. This assumes that the individual is investing regularly, has a stable income, and has enough time to compound. You can easily adjust your pension estimate based on your age and monthly investment. The earlier you start investing, the greater your corpus will be at retirement.