National Pension System: Retirement planning should be done from the beginning of the job, because with this you can collect a huge amount till retirement.
National Pension System: Retirement planning should be done from the beginning of the job, because with this you can collect a huge amount till retirement. National Pension System is one such option in which you can invest in lump sum as well as arrange monthly pension after your retirement.
Save Rs 74 daily, will be a millionaire till retirement
If you want to save only Rs 74 a day and put it in NPS, then you will have Rs 1 crore in your hands till retirement. If you are young and you are 20 years old, then you can start planning for your retirement from now, although people usually do not work at this age. Still, saving Rs 74 a day is not a big deal.
Investing in NPS will make you a millionaire
NPS is a market linked retirement oriented investment option. Under this scheme, NPS money is invested in two places, Equity i.e. stock market and Debt i.e. government bonds and corporate bonds. You can decide how much of NPS money will go into equity only during account opening. Usually up to 75% of the money can go into equity. This means that in this you are expected to get slightly higher returns than PPF or EPF.
Now if you want to become a millionaire through NPS, then its method is very easy, just a little trick is needed. Suppose you are 20 years old at this time. If you invest in NPS by saving Rs 74 for the day i.e. Rs 2230 for the month, then you can do this. That is, when you retire after 40 years, you will be a millionaire. Now suppose you got a return at the rate of 9%. So when you retire, your total pension wealth will be Rs 1.03 crore.
Start investing in NPS
age 20 years
Investment per month Rs 2230
Investment period 40 years
Estimated return 9%
Bookkeeping of NPS Investments
Total invested Rs 10.7 lakh
Total interest received is Rs 92.40 lakh
Pension Wealth Rs 1.03 crore
Total tax saving Rs 3.21 lakh
Now you cannot withdraw all this money at once, you can withdraw only 60 percent of it, the remaining 40 percent you have to put in an annuity plan, from which you get pension every month. Suppose you put 40% of your money in annuity. So when you are 60 years old, you will be able to withdraw a lump sum amount of 61.86 lakhs and assuming the interest is 8%, then every month pension will be around 27500 thousand rupees, that is different.
Pension account
Annuity 40 percent
Estimated interest rate 8%
Received lump sum amount of 61.86 lakhs
Monthly Pension Rs.27496
Although it is a market linked product, it is possible to change its returns. The mantra of any investment is to start investing in it early.
