NPS Calculator:With increasing inflation rate the value of money is decreasing. Amidst these concerns, investors who want to have a big retirement fund may be wondering how much money do they need to invest in which scheme to get a monthly pension of Rs 2 lakh? National Pension System (NPS) is a cost-effective investment option to create a large retirement fund. In this, exemption up to Rs 2 lakh is available on investment under various sections of income tax. NPS is a savings-cum-retirement scheme, available to both government employees and common people.
If you invest in NPS or are thinking of investing money in this scheme to get Rs 2 lakh monthly pension on retirement, then you can understand from the example here that how much you will have to invest every month after subscribing?
How much to invest in NPS for a monthly pension of Rs 2 lakh?
To get a pension of Rs 2 lakh per month after retirement from NPS investment, take a look at the calculation given below.
NPS: How to make monthly pension of Rs 2 lakh
Suppose a person started investing in NPS at the age of 30. Invested Rs 25 thousand every month from my savings in NPS account. He continued doing this for the next 30 years. During this period, an average annual return on deposits was 10 percent. The total estimated retirement corpus on completion of 60 years is becoming Rs 5.69 crore. Understand the calculation below.
Age to start investing in NPS: 30 years
Monthly investment in NPS: 25 thousand rupees
Total investment in 30 years: 90 lakh rupees
Estimated Return on Investment:10 percent annually
Total corpus after 30 years: Rs 5,69,83,134 (Rs 5.69 crore)
If a person subscribes to the NPS scheme at the age of 30 and invests Rs 25,000 every month, if the expected return on deposits in the scheme is 10 per cent per annum, then the total pension wealth after 30 years will be around Rs 5.69 crore. Let us tell you that those investing in NPS are required to buy annuity with at least 40 percent share. The person bought 55 percent annuity for a monthly pension of Rs 2 lakh. See further calculations.
Investing in Annuity Plan: 55 percent
Annuity Returns:8 percent
Lump Sum Value:Rs 3,13,40,724 (3.13 crore)
Monthly Pension: Rs 2,08,938 (above Rs 2 lakh)
(Note: NPS Trust’s calculator has been used in the calculation.
By doing this you or anyone can plan to get a monthly pension of Rs 2 lakh on retirement.
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Who can invest in NPS?
National Pension System is a pension scheme of the Central Government, in which investments are made keeping retirement in mind. Any Indian citizen (government employee or private sector employee) between the age of 18 years to 70 years can open an account in the National Pension System. NRIs are also eligible for this. After opening the account, one has to contribute till the age of 60 years or till maturity i.e. 70 years. If we look at the return history of NPS, till now it has given 8% to 12% annual returns.
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What are the benefits of NPS?
A better investment option to build a large retirement fund.
In this, tax exemption is available on investment up to Rs 1.5 lakh in a year under Section 80C of Income Tax and separately under Section 80CCD (1B) and up to Rs 50,000 i.e. a total of Rs 2 lakh.
Flexible investment modes cater to diverse investor preferences.
Portability is a very special feature of this which allows investors to transfer funds according to job and location.
Regulated and transparent management under the monitoring of PFRDA.
There is facility to manage funds at low cost and the benefit of compounded returns is also available in NPS.
Its monitoring is very easy. There is online access to easily manage and monitor the fund.