Everyone needs income every month after retirement, but not investing properly often results in less payment. If you want to get a monthly pension of ₹50,000, we will tell you how you can get it and what steps you need to take.
How much amount can be withdrawn from NPS at one time?
We are talking about a scheme that offers both a good pension and a huge lump sum. We are talking about National Pension System (NPS). NPS is an investment scheme that offers investors the benefit of both a lump sum and pension at retirement. Immediately after retirement, you can withdraw 80% of the deposited amount as a lump sum, while the remaining 20% is used to buy annuity. After purchasing an annuity, you will receive pension every month.
How to get a monthly pension of ₹50,000?
A monthly pension of ₹50,000 means an annual pension of ₹6 lakh. Suppose you get an average return of 6% on an annuity. This means that to get a monthly pension of ₹50,000, you will need a corpus of ₹1 crore.
What should be the total fund?
This means that to get a monthly pension of ₹50,000, you will have to buy an annuity worth at least ₹1 crore. Now the question arises: Keeping in mind the rule of withdrawing 80% in one go and using 20% for annuity, what is the total fund required to buy an annuity of ₹1 crore? To buy an annuity of ₹1 crore – which will give a monthly pension of ₹50,000 – you will need to deposit a total of ₹5 crore in your NPS account. This is because the government makes it mandatory for non-government employees to withdraw 80% of the accumulated amount at one go at the time of retirement and invest the remaining 20% in annuity.
How much should one invest at the age of 25?
Starting investment at the age of 25 gives you 35 years to invest. In this case, if you get an average return of 10% annually, you will have to invest ₹14,000–₹15,000 every month. By the age of 60, your total fund will be ₹5 crore.
How much amount will you get in lump sum?
If you withdraw 80% of this ₹5 crore fund, you will get a lump sum of ₹4 crore. At the same time, with the remaining 20%—i.e. ₹ 1 crore—you can buy an annuity, which will give you a pension of ₹ 50,000 every month.
How much should one invest at the age of 30?
Similarly, if you start investing in NPS at the age of 30, you will have to invest ₹22,000–₹24,000 every month. If you start at age 35, you will need to invest ₹35,000–₹38,000 every month to get a pension of ₹50,000.
