Retirement: As long as you are in job or you are working, your income keeps coming. With this money you try or live the life of your choice. But have you wondered what will happen if you retire or your working year ends? Let us know about it in detail.
As long as you are in a job or you are working, your income keeps coming. With this money you try or live the life of your choice. But you have wondered what will happen if you retire or the working year is over, especially when you have not done any planning for retirement. If your income suddenly ends during the non-working year, you will find it difficult to live your life as per your wish. You cannot live the life of your choice for long with the money saved in your bank account. Therefore, it is important to do financial planning for retirement in time.
Many people make big mistakes
There are many people who forget to plan for retirement in time. Some people have low income and are not able to save enough after monthly expenses to invest in retirement plans. At the same time, many people spend so much on their current lifestyle and goals other than retirement that they do not have the option of investing to create a retirement fund. But this is a big mistake. Keeping other goals also in mind, it is important to include retirement as the most important goal.
Rajneesh did not think anything till the age of 40
Similar is the case with Rajneesh who is about to turn 40. He has been working for more than 15 years but till now he has not thought about income or pension after retirement. When he looks at inflation 20 years from now, he realizes that after retirement he needs at least Rs 55,000 to Rs 60,000 only for essential expenses. However, when Rajneesh became worried and took advice from experts, he got information about the government pension scheme National Pension System (NPS).
Who can invest in NPS
Any Indian citizen (government employee or private sector employee) between 18 years to 70 years can start investing under the National Pension Scheme. NRIs are also eligible for this. It is necessary to invest in NPS (Nps Account) for at least 20 years. After opening the account, one has to contribute till the age of 60 years or till maturity. The responsibility of investing the amount deposited in NPS is given to the pension fund managers registered by PFRDA. They invest your investments in equity, government securities and non-government securities as well as fixed income instruments.
Calculation for pension
- Age to start investing: 40 years
- Investment in NPS every month: Rs 15 thousand
- Your total investment: Rs 36 lakh
- Estimated return on investment: 8% per annum
- Total corpus: Rs 88,94,209 (88.9 lakh)
- Total profit: Rs 52,94,209 (52.94 lakh)
- Investment of pension wealth in annuity plan: 40 percent
- Annuity Rate: 8%
- Pension wealth: Rs 35.58 lakh
- Lump sum value: Rs 53.36 lakh
- Monthly pension: Rs 23718
SWP planning
Here, out of the lump sum value of Rs 53.36 lakh received on retirement, you can leave Rs 13 lakh in your bank account for emergency and plan for SWP with the remaining Rs 40 lakh.
Investment in SWP: Rs 40 lakh
Estimated return in SWP: 10 percent per annum
Monthly Withdrawal: Rs 35,000
Duration: 25 lakhs
Final Value: Rs 1,72,452
That means, even after withdrawing Rs 35 thousand every month for 25 years, Rs 1.72 lakh will be left in the mutual fund account.
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