The government-funded pension scheme is worth Rs 2 lakh per month. Here’s a description of what that scheme is, how much money you should invest per month.
National Pension System (NPS) Is a voluntary retirement savings plan. It allows subscribers to make a specific contribution to secure their future in pension form. NPS investments with government support are recognized for investing in equity and debt instruments. Like PPF, EPF, Sukanya Rich, etc., this voluntary contributory pension system is an exemption, exemption, exemption (EEE) instrument that receives income tax deduction on maturity and full pension withdrawals. Experts suggest that in order to get a higher monthly pension after retirement, investors should start investing in NPS as soon as possible. Using the NPS Pension Calculator, you can calculate how much you have to contribute to fund a pension of 2 lakh or more per month.
According to the NPS calculator, if one starts investing Rs 5,000 monthly in NPS at the age of 20, until retirement or subscribers reach 60 years, one gets a total maturity of Rs 1.91 crore and an annuity of Rs 1.27 crore. The value of re-investing in an annuity for a monthly pension. Therefore, assuming an annualized return of 6 per cent on an annuity value of Rs 1.27 crore, Rs. 63,768 receive a monthly pension.
Investors still have an option – they can invest the total amount in a SWP (systematic withdrawal plan-systematic withdrawal plan) to increase their monthly income. Like a SIP where investors invest monthly, SWP allows investors to use one’s wealth with a monthly withdrawal facility. Selecting the SWP will be able to withdraw these funds for the long term, expecting at least 8 per cent return.
Therefore, if you are a NPS account holder aged 20 years and investing Rs 5,000 per month for 40 years, you will be able to earn more than Rs. This means that the monthly pension from the pension SWP is Rs. 1.43 lakh and Rs. 63,768 comes from. But from the annuity to Rs. 63,768 monthly returns will continue as long as the investor is alive. But from the SWP, Rs. 1.43 lakhs only for 25 years.
Also Read: National Pension Scheme: Do you know how to save extra tax on NPS?