NPS Calculator: Planning ahead for comfort and financial security after retirement is crucial. The earlier you start preparing for retirement, the more time you’ll have to grow your investments and build a secure retirement fund. Many people overlook this, leading to financial stress later on. The National Pension System (NPS) is one such option that provides you with a lump sum amount as well as regular pension benefits at the time of retirement.
What is NPS and why is it beneficial?
The National Pension System is a government pension scheme that is highly regulated and affordable. Any Indian citizen between the ages of 18 and 70 can invest in it. The amount invested in NPS is invested by PFRDA-registered pension fund managers in equity, government and non-government securities, and fixed-income instruments. However, the return on investment and pension are not guaranteed; they depend on the fund’s performance.
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Pension from a monthly investment of ₹5,000
Let’s say an investor is 35 years old and invests ₹5,000 every month in NPS. If this investment continues until the age of 60, a total contribution of ₹15 lakh will be accumulated over 25 years. With an estimated return of 10%, the total fund can grow to approximately ₹65.95 lakh by the age of 60. About half of this amount can be taken as a lump sum and the other half can be used for an annuity. At an estimated annuity rate of 6%, the investor can receive a pension of approximately ₹16,490 every month.
Who can invest in NPS?
Any Indian citizen between the ages of 18 and 70 can invest in NPS. Certain necessary procedures need to be completed for this. The funds deposited in NPS are managed by pension fund managers, ensuring that your money is invested safely and in the right places for growth.
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Tax Benefits under NPS
Investing in NPS provides an additional tax deduction of up to ₹50,000 under Section 80CCD(1B). Even if you have already invested ₹1.5 lakh under Section 80C, NPS offers the option for further tax savings. Withdrawals of up to 60% of the corpus at retirement are tax-free, making this scheme even more attractive.
Adarsh P
Adarsh Pal is a content writer at Timesbull Media. He specializes in writing news related to industry updates, the automotive sector, banking, telecommunications, the travel sector, and personal finance. Adarsh has previously worked with several digital media channels. He is skilled at presenting news accurately and disseminating information based on...
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