NPS Scheme: In addition, there are numerous options available in the market to invest your funds. Every plan comes with its own advantages and disadvantages. If you are contemplating the safe investment options and strategies, then this update is for you. Today, we will discuss investing in the government-run NPS scheme, which provides a pension of Rs 1 lakh post-retirement.
Let’s understand what the calculation is
The NPS scheme is a retirement and savings program administered by the government. Depending on the sum of money you put into this program, you will receive a pension once you retire. Here, we will explain to you the appropriate age range and duration for investing in order to receive a monthly pension of Rs 1 lakh after reaching the age of 60.
An annual interest rate of 12%
We assume that you have been participating in this scheme since you were 25 years old, continuing to invest until you reach 60 years old and receiving an annual interest rate of 12% on your investment. Let’s now determine the amount of money to put in. To receive a monthly pension of Rs 1 lakh post-retirement, you need to make investments in line with that goal. You will need to spend approximately Rs 7,750 for a period of 25 to 60 years, which is 35 years, with a projected 12% monthly return.
If you consistently invest nearly Rs 7,750 per month for 35 years, your total investment is expected to reach approximately 5 crores. Following this, approximately 40 percent of the funds will need to be used to purchase the annuity plan with an anticipated 6 percent interest rate, resulting in a monthly pension of Rs 1 lakh from this investment.
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