New Delhi: Working people have various options to save for retirement. While working, people keep a part of their salary aside for investment.
People save for retirement so they do not face any problems. If you want to create a retirement corpus for pension, then National Pension System (NPS) can be the best option.
The government runs a scheme to secure the future of private job seekers financially.
The name of this scheme is National Pension Scheme.
If you invest correctly in this scheme, then after retirement, you can get a pension of up to 50 thousand rupees every month.
Here we will give you information about how to get this much pension.
Let us tell you how much you will have to invest monthly to get a pension of 50 thousand rupees.
Get tax exemption
NPS account holder gets income tax exemption of up to Rs 1.5 lakh under section 80C and additional Rs 50,000 under section 80CCD.
However, the income from the annuity is taxed. This income can be deducted from all your other income.
By adding in, your slab will be determined, and income tax will have to be paid accordingly.
In the Tier-1 account of NPS, tax exemption benefits are available for contributions and withdrawals. In this case, the account holders will also get this benefit.
Heavy duty scheme
NPS is a mode of investment. It has been designed so that even after retirement, people can afford their expenses.
It has less risk than equity and higher returns than PPF or Fixed Deposit.
There are four asset classes in NPS – Equity, Corporate Debt, Government Bonds, and Alternative Investment Funds.
Investors have two options to invest in NPS – Active and Auto Choice. The subscriber cannot withdraw the entire corpus on maturity.
He has to invest 40% of the total NPS corpus in buying an annuity plan from a life insurance company.
This annuity amount is the regular pension the subscriber will get after retirement.
The remaining 60 percent amount can be withdrawn in a lump sum. However, some of this can also be invested in buying an annuity.
Thus an NPS subscriber can use more than 40% of his corpus and up to 100% to buy an annuity.
The more money you leave to buy an annuity, the more pension you will get after you retire.
How to get Rs 50,000 pension
You must invest this way if you want to get a pension of 50 thousand rupees every month after retirement.
For this, you have to start investing from the age of 24. You have to deposit Rs 6000 every month.
Accordingly, you will have to save Rs 200 daily. If he invests in NPS like this for 36 years, his total NPS investment at maturity at 10% per annum will be Rs 2,54,50,906.
If he spends 40% of his total corpus on buying an annuity, he will get a pension of Rs 50,902 monthly after retirement.
If someone wants a pension of up to 75 thousand rupees after retirement, he will have to invest 10 thousand rupees monthly in NPS.
Think of it like a 25-year-old person investing Rs 10,000 every month in NPS for the next 35 years.
At a 10% annual return, his total NPS investment at maturity will be Rs 3,82,82,768.
If he spends 40% of his total corpus on buying an annuity, he will get a pension of Rs 76,566 per month after retirement.
