The National Pension System (NPS) is a reliable way for senior citizens to secure their financial future. To achieve a pension of over Rs 50,000 per month, it’s important to understand the investment strategy and the returns expected.
Monthly Investment Strategy
According to the NPS calculator, if you invest Rs 15,000 every month continuously for 25 years, your total investment will amount to Rs 45,00,000. With an expected annual return rate of 10%, the interest accrued on this investment would be Rs 1,55,68,356. Consequently, the total corpus accumulated at the end of 25 years would be Rs 2,00,68,356.
Annuity and Lump Sum Distribution
To ensure a steady monthly pension, it’s advised to use 40% of the total accumulated amount for purchasing an annuity. This translates to Rs 80,27,342 being allocated for the annuity. The remaining 60%, which equals Rs 1,20,41,014, will be available as a lump sum for immediate use or further investment.
Monthly Pension Calculation
With the annuity amount set at Rs 80,27,342, assuming an annual return rate of 8% on the annuity, you would receive a monthly pension of Rs 53,516. This strategy ensures a comfortable pension exceeding Rs 50,000 per month.
Conclusion
By investing Rs 15,000 monthly in the NPS for 25 years, you can accumulate a substantial corpus. Allocating 40% of this corpus to an annuity can yield a monthly pension of Rs 53,516, ensuring financial stability in your senior years.
The NPS provides a structured approach to retirement planning, making it a viable option for those looking to secure a steady income post-retirement.
