NPS: To ensure your wife achieves complete financial independence in the future, you can start arranging a steady income for her now. The National Pension System (NPS) presents an excellent opportunity for this purpose. By utilizing this scheme, you can secure a lump sum exceeding Rs 1 crore and a monthly pension of up to Rs 44,793 for her upon reaching the age of 60. One of the key benefits of the NPS is that you have the flexibility to determine the amount of pension you desire after retirement.
Minimum investment of just Rs 1,000
You can establish a New Pension System (NPS) account in your wife’s name, with the option to contribute monthly or annually based on your preference. Opening an NPS account requires a minimum investment of just Rs 1,000. The account matures when she turns 60, and under the new regulations, you can choose to maintain the account until she is 65 years old.
Here’s the calculation
For illustration, if your wife is currently 30 years old and you invest Rs 5,000 each month into her NPS account, assuming a 10 percent annual return, she would accumulate approximately Rs 1.12 crore by the time she is 60. Out of this total, around Rs 45 lakh would be available for withdrawal, and she would receive a monthly pension of about Rs 45,000 for life.
Here are the specifics:
– Age: 30 years
– Total investment duration: 30 years
– Monthly contribution: Rs 5,000
– Estimated return on investment: 10%
– Total pension fund at maturity: Rs 1,11,98,471
– Amount available for annuity plan: Rs 67,19,083
– Estimated annuity rate: 8%
– Monthly pension: Rs 44,793.
The NPS is a Social Security Scheme initiated by the Central Government, with your investments managed by professional fund managers appointed by the government. This ensures that your investment in the NPS is secure, although it is important to note that the returns on your contributions are not guaranteed.
Financial planners indicate that the National Pension System (NPS) has provided an average annual return of 10 to 11 percent since its launch. Additionally, NPS offers tax advantages, including a tax exemption of up to Rs 2 lakh and a tax exemption on the withdrawal of 60% of the accumulated amount. Furthermore, once the Rs 1.5 lakh limit is reached, investors can benefit from an additional tax exemption on investments up to Rs 50,000. This extra exemption allows individuals to save as much as Rs 2 lakh in taxes each year through NPS.
Disclaimer : For any financial invest anywhere on your own responsibility, Times Bull will not be responsible for it.