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NPS Calculator for Retirement: Planning for post-retirement life has become the most important chapter of financial planning in today’s time. This scheme can prove to be very helpful in this work.
In the matter of financial planning, it has become very important to prepare a plan for the time after retirement. Especially if you work in the private sector, it is important to plan well for financial security after retirement, so that you can live the last years of your life without tension. For this, the ‘National Pension System’ can prove to be of great use. With its help, you can create a fund of Rs 2 crore to Rs 6 crore for retirement.
Fund of crores or pension every month
First of all, let us tell you that this scheme also proves helpful in saving Income Tax. Along with this, after retiring from the job, this scheme also guarantees a good fund or a fixed amount every month. By planning properly and investing in this scheme, a pension of up to Rs 50 thousand can be arranged every month or a fund of crores of rupees can be created, which will be enough to meet all your necessary expenses in post-retirement life. Can prove to be a reliable source of
Pension fund managers also have faith
The return figures of NPS are also impressive, which is the reason why almost all pension fund managers are investing predominantly in equities under the National Pension System. It is interesting that most of the fund managers who have invested in it have been able to get returns in double digits i.e. more than 10-10%. This is confirmed by the data of NPS Scheme-E (Tier-1) available on the website of NPS Trust.
Got returns in NPS in this way
According to statistics, since its launch on May 15, 2009, SBI Pension Fund has given an annual return of 10.43 per cent. HDFC Pension Fund has given the highest return of 14.14 per cent. This fund was started on 1 August 2013. LIC Pension Fund has given a return of 12.24% so far. Looking at other fund managers, UTI SRL, ICICI Pension Fund, Kotak Pension Fund and Birla Pension Fund have given more than 11% returns each since their inception.
See the calculation of crores of funds
These figures show that the subscribers of the National Pension System can be successful in getting excellent returns. At least the statistics of the last 10-12 years show this. For example, let’s assume that you get an average return of 10% in this. In this case, you can create a fund of Rs 1.89 crore in 35 years, Rs 1.13 crore in 30 years and Rs 66 lakh in 25 years by investing Rs 5-5 thousand in it every month. On the other hand, if you invest Rs 10-10 thousand every month, then you can make Rs 3.8 crore in 35 years and Rs 2.26 crore in 30 years. By increasing the monthly investment to Rs 15,000, a fund of Rs 5.69 crore can be created in 35 years.
Pension is received in this way
Now let’s see the calculation of monthly pension. National Pension Scheme is considered a long term investment. In this, while working, you deposit money little by little, which you get after retirement. Investors get the money deposited in the National Pension Scheme in two ways. You can withdraw a limited part of it in one go, while the other part will be deposited for pension, from which annuity will be purchased. The more money you leave to buy an annuity, the more money you will get as pension after you retire.
50 thousand monthly pension formula
NPS Tier-1 has been prepared according to retirement only. In this, you can open an account by depositing a minimum of Rs.500. After retirement, you can withdraw up to 60% of the amount at one go. Annuities are bought from the remaining 40 percent amount, which ensures monthly pension. In such a situation, to get a pension of 50 thousand rupees every month, you will have to prepare a fund of 2.5 crore rupees. If this happens, after retirement, you will withdraw 60% i.e. Rs 1.5 crore in one go, while annuity will be purchased from the remaining Rs 01 crore. If you calculate by considering the annual annuity rate as 6%, then in this situation you will get a pension of 50 thousand rupees every month. If you buy an annuity from a higher portion, then even with less funds, it will make sense.
NPS is also helpful in saving tax
Tier-1 account of NPS offers tax exemption benefits on both contribution and withdrawal. Talking about contribution, in case of NPS Tier-1 account, the account holder gets the benefit of tax deduction of up to Rs 1.5 lakh under Income Tax Act 80C and Rs 50 thousand under 80CCD (1B). At the same time, the entire amount withdrawn from NPS Tier-1 account is exempt from tax. However, there is tax liability on the income from annuity. By adding this income to all your other incomes, your slab will be determined and income tax will have to be paid accordingly.