Best retirement plan: If you did not get a government job, do not be disappointed. Because, those benefits can be found in a private job as well. Retirement planning should be done by anyone, no matter who it is. But, even in a private job, one gets the benefit of pension after retirement. The best option for this is the National Pension System. The sooner you start investing in NPS, the more benefits you will get after retirement.
How will you get the benefit?
There is no guarantee of any kind of minimum pension on investment in NPS. It will depend on your annuity amount and the estimated return on it. You get the opportunity to create a big retirement fund. There is also an option of getting a good pension every month.
Age and investment will determine the corpus
With the help of NPS calculator, you can understand that if you are 25 years old and invest 10 thousand rupees every month, then what will be your estimated corpus on retirement at the age of 60? Also, how much monthly pension will you get. You have to retire at the age of 60. Your current age is 25 and you invest 10,000 rupees every month in NPS.
Understand how much fund and pension you will get on retirement with the help of SBI Pension Fund’s NPS Calculator.
Monthly investment in NPS: ₹10,000
Total contribution in 35 years: ₹42 lakh
Estimated return on investment: 10%
Total amount on maturity: ₹3.75 crore
Annuity purchase: 40% (₹1.5 crore)
Estimated annuity rate: 6%
Pension at age 60: ₹74,958 per month
If you take 40 percent annuity in NPS (it is necessary to keep this minimum) and the annuity rate is 6 percent per annum, then after retirement you will get about 2.25 crore rupees in lump sum and 1.5 crore rupees will go into annuity. From this annuity amount, you will get a pension of about 75 thousand rupees every month. The responsibility of investing the amount deposited in NPS is given to the pension fund managers registered by PFRDA.
It is necessary to buy annuity of at least 40 percent of the amount in the National Pension System (NPS). According to contract between you and the insurance company. The amount invested under annuity is received in the form of pension after retirement and the remaining amount of NPS can be withdrawn in lump sum.
NPS: Extra tax exemption in 80CCD(1B)
Under NPS, under Section 80CCD(1B) of the Income Tax Act, you get the benefit of tax exemption on investment up to Rs 50,000. If you have completed the limit of Rs 1.5 lakh under Section 80C, then NPS can also help you in extra tax savings. There is no tax on withdrawal of up to 60 percent of the amount on maturity of this scheme.
