Retirement planning is essential for a financially secure future. If you don’t always have family and relatives to support you in old age, smart investing is a sure bet. Many individuals today are looking for financial options to create a retirement pool and ensure a steady income after retirement without being dependent on others.
If you also want a reliable pension plan, the National Pension Scheme (NPS) can be a very effective option. By investing in NPS, you can earn a monthly pension of lakhs depending on your investment strategy.
Unlimited investment opportunities
NPS allows you to invest as you wish, as there are no restrictions imposed by the government. Even if you start investing at the age of 40, you can accumulate enough corpus for retirement.
Under the plan, the investment is up to age 60. For example, if you start at age 40, you have a 20-year investment period. If your target is a pension of Rs 1 lakh per month, you would need to invest Rs 20,000 per month.
How can NPS provide Rs 1 lakh monthly pension
Here’s how your savings can grow:
- If you invest Rs 20,000 every month, and your investments grow by 10 per cent every year, you will save Rs 1,37,46,000 in your NPS account after 20 years.
- This will translate into a corpus of about Rs 3,22,90,815, giving you a return of Rs 1,85,44,815 over two decades.
Now, you have to devote part of your corpus to the annual plan. With an annual return of 8 per cent, your monthly pension will increase to Rs 1 lakh. Additionally, you get a one-time income of about Rs 1.62 crore.
Why choose NPS?
NPS is a government-backed, tax-efficient retirement scheme, making it a popular choice for securing post-retirement income. The flexibility to invest without limits, combined with compounding benefits and annuity options, ensures a financially stable future for investors.
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