Retirement Planning: Nowadays, everyone is investing to secure their family’s future. Planning is essential to prepare for a regular income after retirement. Choosing the right investment option is crucial to ensuring a regular income after retirement. Currently, the NPS scheme is providing significant benefits to individuals. It’s important to note that even small savings can generate substantial long-term income.
Know when you can start investing
If you are 30 years old and invest ₹5,000 monthly in NPS, it translates to ₹60,000 annually. If you continue this investment for 30 years, your total investment will reach ₹18 lakh.
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Compounding will help your funds grow
If NPS earns an annual return of approximately 10%, your total corpus at retirement could reach approximately ₹1.13 crore. This means that your ₹18 lakh investment will yield approximately ₹95.96 lakh in interest. This is the true power of compounding, which multiplies your money significantly over time.
Two Options Available at Retirement
You have two options at retirement. In the first option, you can start your pension by taking an annuity plan with your entire corpus. In the second option, you can withdraw 60% of your total corpus and invest the remaining 40% in an annuity plan. It is crucial to invest at least 40% of your corpus in an annuity.
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Learn What the NPS Scheme Is
NPS is a defined contribution pension system. The NPS was launched by the government in 2004 and is regulated and supervised by the Pension Fund Regulatory and Development Authority. It is designed to encourage systematic and regular savings during one’s working life, leading to a stable income after retirement.