Pension is a great initiative by the Indian government. If you want to ensure that you do not have to worry about money in your old age, then the government has launched a special scheme for you. By investing in this scheme, you can receive a pension of Rs 47,000 every month. The name of this scheme is NPS (National Pension Scheme). By investing in this pension scheme, you can receive both a lump sum amount and a monthly pension. NPS is one of the best options for a pension system, allowing you to earn every month.
Start with as Low as Rs 1000
You can start investing in the National Pension Scheme (NPS) with as little as Rs 1000. NPS accounts mature at the age of 60. However, under new rules, you can now invest in this scheme until you reach 65 years old.
How to Build a Crore-Rupee Fund
Let’s see how you can accumulate a large fund by investing in NPS. For example, if your wife is 30 years old and you invest Rs 5000 every month, your yearly investment will be Rs 60,000. If you continue this for the next 30 years, your total investment will be Rs 18 lakh. But by the time of retirement, your fund will grow to Rs 1,76,49,569.
Interest of Rs 1.05 Crore
Out of the total amount, Rs 1,05,89,741 will come from interest. This calculation assumes an average annual return of 12 percent, with compounding interest. Thanks to compounding, your investment will grow significantly over time.
Here’s the breakdown, according to HDFC Pension’s NPS calculator:
- Age to Start Investment: 30 years
- Total Investment Period: 30 years
- Monthly Deposit: Rs 5,000
- Estimated Return on Investment: 12 per cent
- Total Pension Fund at Maturity: Rs 1,76,49,569
- Annuity Plan (40 percent): Rs 70,59,828
- Estimated Annuity Rate: 8 percent
- Monthly Pension: Rs 47,066
Partial Withdrawals Available
The Pension Fund Regulatory and Development Authority (PFRDA) has introduced new rules this year. NPS account holders can now make partial withdrawals from their pension funds. You can submit applications for partial withdrawals at the nodal offices, and you can also apply online.