NPS Calculation: Start investing at the age of 25, you will get pension worth lakhs on retirement

Knews Desk– Being financially secure after retirement is a big need for every person. After the end of the job, there is no source of regular income, in such a situation it becomes very important to plan in advance to meet the expenses of old age. For this purpose, the government has come up with a scheme like National Pension System (NPS), in which a large fund can be created for retirement by investing for a long time. NPS is a market linked retirement scheme, in which the amount invested increases depending on the performance of the market. There is no fixed interest rate or guaranteed return in this. However, investing for a long time gives the benefit of compounding, due to which even small savings can turn into a huge amount in the future. If a person starts investing in NPS from the age of 25 and deposits Rs 5,000 every month, then by the age of 60 he can have a fund of around Rs 1.90 crore. In this calculation an average annual return of 10 percent has been considered. However, the actual return may be more or less depending on the market conditions.

How to get money after 60 years of age?

In NPS, the amount deposited at the time of retirement is divided into two parts. According to the rules, an investor can withdraw 60 percent of the total deposited amount in lump sum. At the same time, annuity is purchased from the remaining 40 percent of the amount, from which pension is received every month. For example, if by investing Rs 5,000 every month from the age of 25, a fund of about Rs 1.90 crore is created by the age of 60, then about Rs 1.14 crore can be withdrawn from it together. From the remaining amount, a pension of about Rs 44,300 per month can be obtained. If a person invests more, then the pension received after retirement can also increase. For example, by depositing Rs 10,000 every month, the pension can reach around Rs 88,700. At the same time, if someone invests Rs 2,000 per month, he can get a monthly pension of around Rs 17,700.

Benefits of starting investment early

The biggest advantage in NPS is time. The earlier investment is started, the more money grows through compounding. If a person starts investing Rs 5,000 per month at the age of 30 instead of 25, then by the age of 60 his fund can reduce to around Rs 1.13 crore. In this, he will get around Rs 67.8 lakh in lump sum and the pension can be around Rs 26,300 per month. Whereas, if the investment is started at the age of 35, then this investment can create a fund of around Rs 65 lakh. In such a situation, the lump sum amount can be around Rs 39 lakh and the monthly pension can be around Rs 15,200. That means delay in starting investment has a big impact on the retirement fund.

Who can open NPS account?

Any Indian citizen between 18 years to 70 years can open an account in NPS. Government employees, private employees, businessmen and freelancers can all invest in it. The government also contributes to the NPS account for central government employees. In this scheme, investors can deposit money on every month, three months or yearly basis as per their convenience. However, before investing, it is important to keep in mind your financial condition, risk appetite and future needs. The sooner you start preparing for retirement, the better results you can get. NPS offers the option of long-term savings and pension, but there is no guarantee of returns as it is linked to the investment market. Therefore, any investment decision should be taken thoughtfully.