National Pension System benefits: With just Rs 138/day, you can get Rs 50,000/month; Rs 19 lakh cash!

National Pension System: Got your first job in private sector recently? Now is the best time for you to start saving for monthly pension post retirement. You may find this surprising as to why so early? Remember: Had you been in a government job, investment for your pension would have started already. So, why not start doing the same when you are in the private sector and best options are available. And here is a pure economic reason that will motivate you further. 

If you start at the age of 25, then an investment of just around around Rs 138 (Or Rs 4150 per month in the National Pension System) a day can result in a pension of over Rs 50,000/month. Moreover, you will also become eligible for a big lump sum that will come handy post retirement. The target of Rs 50,000/month pension will become more difficult if you delay investing for the purpose. 

At an expected 8% rate of return on NPS investment, you can get Rs 50,452/month pension and a lump sum of Rs 18,91,954 by investing just Rs 4150 (around Rs 138/Day) every month. However, if you start investing at the age of 30, they you will have to invest at least around Rs 6400 for a pension of Rs 50,000/month. At 35, you will have to invest Rs 10,000/month for the pension around Rs 50,000. 

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The National Pension System (NPS) is a pension plan backed by the Government of India to provide financial security and stability during old age. The scheme is open to all citizens of the country between the ages of 18 and 60 on a voluntary basis. 

Through NPS, you can save and invest systematically during your working life. A person is required to invest a minimum of Rs 500/year to subscribe to the scheme. Upon retirement, you will get a part of your money and the remaining can be withdrawn on a monthly basis. Ivestment uo to Rs 50,000/year is also exempted for income tax calculation. 

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NPS is basically a contributory pension scheme and technology driven, enabling small amounts to grow as a fund for life’s second innings. The NPS is regulated by PFRDA. Read more about NPS Eligibility, Rules HERE. 

Note: Online calculators have been used for the article