Right now The National Pension Scheme (NPS) is a great retirement plan for every Indian citizen, available to people between the ages of 18 and 70 years. If you’re a government worker, part of the private sector, or an NRI, this plan offers a straightforward and effective way to secure your future. The main goal of this scheme is to ensure you receive a consistent monthly pension along with a substantial lump sum upon retirement.
NPS Scheme
When planned properly, the NPS can help you achieve financial freedom even after you retire. Take Suresh, for instance. At 40, he decided to invest in NPS for his retirement. With guidance from a financial advisor, he committed to a monthly investment of Rs 20,000 for 20 years. By the time he turns 60, he expects to accumulate a lump sum of Rs 1.62 crore and receive a monthly pension of about Rs 1 lakh. NPS not only provides attractive returns but also offers tax benefits.
How to plan NPS at the age of 40?
Starting Age: 40 years
Investment Duration: 20 years (until age 60)
Monthly Contribution: Rs. 20,000
Annual Top-up: 10%
Total Investment: Rs 1,37,46,000 (over 20 years)
Expected Returns: 10% p.a.
Total Corpus: Rs 3,22,90,815 (approximately Rs 3.23 crore)
Net Profit: Rs 1,85,44,815 (around Rs 1.85 crore)
Total Tax Savings: Rs 41,23,800.
What can you expect after retirement?
Lump sum withdrawal: Rs 1,61,45,407 (approximately ₹1.62 crore)
Annuity Investment: Rs. 1,61,45,408 (55%)
Monthly Pension: Rs 1,07,636 (roughly Rs 1 lakh).
If you’re 40 and concerned about your retirement, NPS could be an excellent choice. By making timely and informed decisions, you can set the stage for a prosperous future.
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