NPS: Want a pension of Rs 50 thousand on retirement, deposit small amount every month now..
Employees who contribute to the National Pension System (NPS) are worried about their pension after retirement. This is the reason why all the government employees are also demanding old pensions. Amidst all these issues, how much pension can one actually get through NPS and if someone wants a pension of Rs 50 thousand, then how much rupees will have to be contributed every month?
You must be aware that most of the accounts under NPS are opened by government employees. In this, 10 percent contribution of Basic and DA is made by the employee and 14 percent contribution is made by the employer i.e. the government. In this way, 24 percent of the salary is deposited in NPS every month. In this way, the total contribution increases to a much higher level. In such a situation, your contribution to get a pension of Rs 50 thousand per month becomes even less.
How much money will have to be deposited?
If you have started your job at the age of 30 and want a monthly pension of Rs 50 thousand, then you will have to contribute Rs 12 thousand in NPS. Let us explain its simple mathematics to you. If you start working at 30 years and retire at 60 years, you will work for a total of 30 years. Here the average contribution every month will be Rs 12 thousand, then in 30 years your total contribution will be Rs 43,20,000. If a 10 percent annual interest rate is also added to this, then a huge corpus will be ready by the time of retirement.
How much money will you make in retirement?
On a contribution of just Rs 12 thousand, you will get a total interest of Rs 2,25,56,331 in 30 years at the rate of 10 percent. In this way, your total money i.e. corpus will increase to Rs 2,68,76,331. The rule of NPS is that on retirement you can withdraw 60 percent of the total corpus in a lump sum. In this way, you will get Rs 1,61,25,798 together.
How much pension will you get?
After withdrawing the lump sum amount, you will be left with 40 percent of the amount to buy an annuity. This means that after withdrawing the lump sum money, you can buy an annuity with the remaining Rs 1,07,50,533. Annuity is usually purchased from insurance companies, on which interest is available close to that of annual FD. Pension is given by dividing this interest every month. Suppose you are getting 6 percent interest, then you will get only Rs 6,45,024 annually as interest on the annuity amount. If we divide it every month then a pension of Rs 53,752 will be made.
You will also save a lot of tax
NPS is a tax saving scheme, in which you also get tax exemption on investments of Rs 1.5 lakh annually under Section 80C of Income Tax. In this way your average tax saving will be around Rs 12,96,000 lakh. Not only this, the interest received on investment in NPS is also tax-exempt. This means that the entire amount received on retirement will be free from tax.
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