Nowadays, when the thought of retirement seems scary amidst rising inflation, it is natural to think that how will we spend our life after retirement?
But don’t panic!
If you do a little planning now and invest wisely, you can live a comfortable and happy life even after retirement.
NPS (National Pension System) can help you in this!
NPS is a voluntary pension scheme launched by the Government of India, which provides you regular income after retirement.
Let us know how much you can invest in NPS to get a pension of Rs 1 lakh every month after retirement.
NPS Calculator: An Example
Suppose you are 25 years old and you want to invest in NPS for 35 years.
If you invest Rs 12,000 every month, your total investment will be Rs 45 lakh with 10% annual return.
On retirement you will get a hefty corpus of Rs 4.5 crore.
Out of this, you will deposit 45% (Rs 2.025 crore) as annuity.
With 6% annual annuity rate, you will get a pension of Rs 1.07 lakh every month.
This is just an example.
You can create your pension plan using the NPS calculator as per your age, investment period, and desired amount of pension after retirement.
Benefits of investing in NPS:
Tax Benefits: On investing in NPS, you get the benefit of tax deduction up to Rs 1.5 lakh under Section 80C of the Income Tax Act.
Investment Options: NPS lets you invest in a variety of investment options like equity, debt and money market.
Portability: You can easily transfer your NPS account while moving from one job to another.
Pension Guarantee: In NPS you get guaranteed regular income after retirement.
How to invest in NPS:
Open NPS Account: You can open an NPS account online or through a bank, mutual fund house or NBFC.
Submit KYC Documents: You need to submit the required documents to complete your KYC (Know Your Customer).
Choose investment option: You can choose from a variety of investment options like equity, debt and money market as per your choice.
Invest regularly: You have to contribute to NPS regularly every month.