New Delhi: To get Rs 50,000 pension per month through National Pension System (NPS), the subscriber needs to consider many points such as the age at which he would start NPS investment, NPS corpus, monthly contribution, return on investment, return of NPS annuity plan, etc. Let’s see how one can get Rs 50,000 pension per month in NPS.
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First, the NPS subscriber needs to decide at what age an individual needs to start NPS investment. The sooner the investor starts, the contribution amount will be lower. Suppose, the person starts at the age of 25 and let’s assume that the depositor’s NPS account fetches average return of 9 per cent over the course of next 35 years i.e. from the time of 25 years of age to the time he/she would attain retirement at 60, then that person would have to make monthly contribution of around Rs 8,500 in his NPS account. The depositor would also have to assume that the NPS annuity plan or the NPS Pension Plan purchased upon retirement with 40 per cent of NPS corpus would fetch six per cent return. This way he would be able to accumulate NPS corpus of Rs 2.5 crore.
According to NPS rules, it is mandatory for the subscriber to purchase an NPS annuity plan with at least 40 per cent of the total NPS accumulated corpus, so 40 per cent of Rs 2.5 crore would come to be Rs 1 crore. If a person buys any NPS annuity or NPS pension plan of Rs 1 crore and on assumed return of six per cent on the annuity or pension plan, one would be able to get Rs 50,000 pension per month in NPS.
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The below table illustrates that to get Rs 50,000 pension per month in NPS, how much contribution one needs to make in NPS account and for how many years and at what age he should start investment.
Starting Age (In Yrs)
NPS Monthly Contribution
Duration (In Yrs)
Annuity Plan Assumed Return (%)
Purchase Price of Annuity Plan (In Rs Cr)
Accumulated Corpus (In Rs Cr)
25
8,500
35
6
1
2.5
35
22,000
25
6
1
2.5
45
65,000
15
6
1
2.5
* Following two conditions apply here:
Assumed Return on NPS investment: 9%
Annuity Plan purchased with 40 per cent of NPS corpus
To get Rs 50,000 pension per month in NPS, one needs to make monthly contribution of around Rs 8,500 in NPS account right from the time one is of 25 years of age along with assumption of 9 per cent return on investment among other things. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
