What to do after retirement to get pension of Rs 75,000 per month
According to Pranjal Kamra, CEO, Finology Ventures, NPS is an avenue of investment. It has been designed in such a way that people can bear their expenses even after retirement. It has less risk than Equity and has higher returns than PPF or Fixed Deposit. There are four asset classes in NPS – Equity, Corporate Debt, Government Bonds and Alternative Investment Funds. An investor has two options to invest in NPS – Active and Auto Choice.
can’t withdraw all the money
The subscriber cannot withdraw the entire corpus on maturity. He will have to invest 40 per cent of the total NPS corpus in buying an annuity plan from a life insurance company. This annuity amount is the regular pension which the subscriber will get after retirement. The remaining 60% can be withdrawn in a lump sum. However, some part of it can also be invested in buying an annuity. Thus, an NPS subscriber can use more than 40 per cent of his corpus and up to 100 per cent to buy annuity.
If you want to get a pension of Rs 75,000 every month after retirement, then you have to invest like this. For this, there should be an NPS corpus of Rs 3.83 crore at maturity (at the age of 60 years). Here we are assuming that only a mandatory 40 per cent of the NPS corpus will be invested in buying annuity. Suppose the annuity rate is 6% per annum. Here we are telling you how you can build an NPS corpus of Rs 3.83 crore at the time of retirement.
How to get Rs 75,000 pension
For example, a person of 25 years invests Rs 10,000 every month in NPS for the next 35 years. His total NPS investment at maturity at 10% annualized return would be Rs 3,82,82,768. If he spends 40 per cent of his total corpus on buying annuity, then he will get a pension of Rs 76,566 every month after retirement.
Demonstration of college teachers for restoration of old pension scheme, protest by dam black band
Similarly, if someone starts investing at the age of 30, he will have to invest Rs 16,500 every month for the next 30 years. He will get a pension of Rs 75,218 every month after retirement. If someone joins NPS at the age of 35, he will have to contribute Rs 28,500 every month for the next 25 years. After retirement, he will get a pension of Rs 76,260. This calculation is based on 6% annuity rate and 10% return. This return depends on the market conditions.
