National Pension Scheme(NPS) can be one of very good investment option for working class people. Investing in National Pension Scheme (NPS) helps in creating long term savings and wealth creation.
People working in private companies should be planning more carefully about life after retirement. Especially, those working in private companies worry more about how their expenses will go after retirement. Start investing for pension now. For this, the National Pension System(NPS) can prove to be a better option for you.
Start Investing Early
Best Retirement planning starts from the time of starting your job so that maximum pension can be availed at retirement. If one starts investing Rs.4,500 every month in NPS from as early age of 21, then till the age of 60, he will be investing for 39 years. i.e. Rs.54,000 annually, his investment in 39 years will be Rs.21.06 lakh. If we consider average return of 10 percent in NPS, then on maturity, he will get Rs.2.59 crore. Accordingly, on retirement at the age of 60, a pension of Rs.51,848 will be received every month. This calculation has been done on an estimate. By the way, on an average, 8 to 12 percent returns are available in NPS.
How much Annuity to withdraw?
In NPS, if you take an annuity of 40 percent and the annual rate of annuity is 6 percent, after retirement you will get a lump sum of Rs.1.56 crore. The remaining Rs.1.04 crore will go towards annuity. Pension will be given every month from this annuity. The higher the annuity amount, the higher will be the pension.