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NPS Pension Calculation: It is important to invest early in NPS to get a good pension after retirement. If a person invests Rs 1 lakh every month, then how much pension will he get on retirement? The calculation of pension for people of 30, 40 and 50 years of age gives surprising results.
NPS Calculation: The National Pension System (NPS), which started in the year 2004, was initially launched only for government employees, but now it has been opened to all the working people as well as the common man. This means that any Indian citizen can secure a pension for himself in old age by investing in NIPS. Due to some of its features, this option has become one of the most preferred pension options today. In such a situation, this question must be arising in the minds of many people that if Rs 1 lakh is invested every month in NPS, then how much pension can be received on retirement.
First of all, you need to know that NPS is a market linked retirement scheme, which invests your investment in the stock market and to bring stability in it, you also invest some money in debt funds and securities. Since its inception, the average returns of NPS have been around 9 to 12 percent. If it is considered fixed at 10 percent, then it can give stable returns by combining equity and debt options.
What are the rules for retirement?
Whatever be the return you get by investing in NPS, a rule has been made to withdraw money from it at retirement. By investing in this, whatever money you earn by investing in it, including the invested amount and interest returns, 60 percent of it can be withdrawn in lump sum on retirement. There will be no need to pay tax on this, but it is necessary to buy an annuity plan with the remaining 40 percent amount. Every month’s pension is decided by dividing the annual interest on this amount into 12 parts.
How much pension will you get if you start in 30 years?
If a person starts investing in NPS from the age of 30, then by investing Rs 1 lakh every month, there will be an investment of Rs 12 lakh annually. In this way, the total investment by the retirement age of 60 years will be Rs 3.60 crore. If you get an average return of 10 percent annually on this, then the total return till retirement will reach around Rs 19 crore and on maturity your total amount will be Rs 22.60 crore. 60 percent of its amount i.e. Rs 13.56 crore will be received in lump sum and the remaining 40 percent i.e. Rs 9.04 crore will have to be purchased as annuity. If 6 percent annual interest is available on this annuity, then the total interest for 12 months will be Rs 54.24 lakh. This means you can get a pension of Rs 4.52 lakh every month.
How will 40 year olds face old age?
If a person starts investing in NPS at the age of 40 and is investing Rs 1 lakh every month, then the total investment by the time of retirement age will be Rs 2.40 crore. According to 10 percent annual interest rate, interest of Rs 5.19 crore will be received on this till retirement and the total maturity corpus will reach Rs 7.59 crore. You will get 60 percent of this amount i.e. Rs 4.55 crore in lump sum on retirement. Annuity will have to be purchased with the remaining 40 percent i.e. Rs 3.04 crore. If 6 percent annual interest is received on this annuity, then the total interest for 12 months will be Rs 18.24 lakh. This means that you will get a pension of Rs 1.52 lakh every month.
If you start investing at the age of 50…
Now let’s talk about such people who open an NPS account at the age of 50 and invest Rs 1 lakh every month. The total investment of such people till retirement will be Rs 1.20 crore. On this, at an interest rate of 10 percent per annum, you will get a return of Rs 84.84 lakh till retirement. The total amount on maturity will be Rs 2.04 crore. Out of this, 60 percent amount will be given in lump sum and 40 percent i.e. Rs 81.93 lakh will have to be purchased for annuity plan. If 6 percent interest is earned on this, the total pension for the year will be Rs 4.91 lakh. That means the pension amount every month will be Rs 40.96 thousand.
Pension amount will also increase as returns increase
This calculation of pension on NPS has been done at an interest rate of 10 percent per annum, but sometimes an interest of 12 percent per annum is available on it. If the return is 12 percent, the total corpus at retirement can be 20 to 30 percent more. Similarly, if the annuity return is 7 percent, the pension amount can increase by 10 to 15 percent. Overall, one thing is clear that if you start investing in NPS early, you can get a good pension after retirement.
