Dreaming of a 2 Lakh Monthly Pension: If you have not accumulated enough for your golden years, it may be difficult to manage your expenses during retirement. However, prudent planning can result in the accumulation of a substantial retirement nest egg. To achieve this, you must invest in numerous investment options and pension plans.
There are numerous government-sponsored pension plans that provide a consistent income and retirement benefits. The National Pension System (NPS), which is administered by the Pension Fund Regulatory and Development Authority (PFRDA), is one of the most prominent pension plans.
Dreaming of a 2 Lakh Monthly Pension
The National Pension System (NPS) is a voluntary savings scheme available to a majority of Indian citizens. Launched in 2004, the program was initially restricted to government employees but was later made available to all citizens between the ages of 18 and 70. Current returns on NPS investments range from 9 to 12 percent per year. Under Sections 80 CCD(1) and 80 CCD 1(B) of the 1961 Income Tax Act, tax benefits of up to Rs 2 lakh per year may be claimed.
How to earn a monthly pension of Rs 2 lakh with an NPS investment?
Now, let’s examine how to earn a monthly pension of Rs 2 lakh through NPS investments. If an individual begins contributing to the NPS at age 40, the duration of the investment will be 20 years, until the age of retirement at age 60. Therefore, in order to retire with a monthly pension of Rs 2 lakh, you must invest Rs 1,30,000 per month for 20 years. Your total investment will amount to Rs 3.12 crore, and assuming an annual return of 10%, your total gains will be Rs 6.83 crore. After 20 years, your total corpus fund will be close to 10 billion rupees.
If you were to withdraw 60% of the NPS investment’s corpus as a single sum upon maturity, the amount would be Rs 5.97 crore. The remaining 40% of the retirement fund, or Rs 3,98 crore, will be available for annuity payments. Therefore, if you contemplate an annuity rate of 6%, your monthly pension will be Rs 1,99 lakh. However, it is advisable to start investing in NPS at an early age to create a higher corpus via smaller contributions.