Retirement planning is very important for financial security. National Pension System (NPS) is one of the safest options for raising retirement funds. If your target is to achieve a monthly income of Rs 1 lakh after retirement, then this is possible through NPS investment. Here we have explained how you can achieve your goal by doing this.
NPS is designed to ensure a stable income during retirement age. It provides a lump sum amount on reaching retirement and regular monthly income thereafter. It has the benefit of compounding returns. The advantage of this is that a long investment period can increase your income tremendously.
How to get pension of Rs 1 lakh?
To get a monthly pension of Rs 1 lakh, you should consider starting early. For example, if you start investing Rs 3,475 every month in NPS at the age of 18 and continue for 47 years, you can potentially get a pension of more than Rs 1,00,000 per month by the time you retire at the age of 65.
Also Read: Jio’s Dhansu Reacharge plan: High speed internet for Rs 599, 15 OTT apps free
Apart from this, you can customize your NPS investment portfolio. Investing 60% of your funds in equity and 40% in debt instruments can diversify your investments. This can give you a return of around 10 percent.
How is retirement fund invested?
If you are planning for long-term investment and want to retire after 30 years, then contributing Rs 15,000 every month to your NPS account can help you get a pension of Rs 1 lakh every month.
It is important to note that 60 per cent of the retirement fund is invested in annuity plans, which give a return of 6 per cent per annum. Those planning to retire in 20 years will have to contribute around Rs 32,000 every month. Assuming a 12 per cent return rate, this will help you build a similar retirement corpus in a short period of time.
