NPS: If you are a working professional, you too must be worried about your retirement. This is the reason why people do retirement planning, but for this, you have to think from now on how much money is needed and where to invest money. It is also worth keeping in mind here that the sooner you start investing, the less you will have to invest every month. One of the best options for retirement planning is NPS (National Pension System), through which by investing a little, you will get huge money in retirement. Let us know that if you want Rs 5 crore on retirement (how to get Rs. 5 crore on retirement), then how much money to invest and how.

NPS: What is the formula to get Rs 5 crore?

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First of all, it is important to understand that this formula is applicable to those youth who have just started their job.

Suppose you want to accumulate Rs 5 crore on retirement i.e. at the age of 60 and you have already got a job before the age of 25.

If you start saving Rs 442 from your salary every day from the age of 25 and invest it in NPS, then you will have Rs 5 crore on retirement.

NPS: How will Rs 442 become Rs 5 crore?

If you save Rs 442 daily, it means that you will have to deposit around Rs 13,260 every month.

If you start investing from the age of 25, you will invest for 35 years till the age of 60.

If you have invested this money in NPS, you are likely to get an average interest of 10 per cent.

In this way, with compounding interest, your money will become Rs 5.12 crore at the age of 60.

NPS: This will happen through the power of compounding

If you invest Rs 13,260 every month in NPS, in 35 years, you will invest a total of Rs 56,70,200.

Now the question arises that if the investment is Rs 56.70 lakh, then where will the Rs 5 crore come from.

Actually this will be possible with the power of compounding.

Under this, you will not only get interest on your principal amount every year, you will also get interest on the interest received on that principal amount.

In such a situation, by the time you deposit Rs 56.70 lakh for 35 years, you will have received a total interest of Rs 4.55 crore.

In this way, your total investment will be Rs 5.12 crore.

NPS: Will you have Rs 5.12 crore in hand on retirement?

It would be wrong to say that you will have Rs 5.12 crore in your hands upon retirement.

This is because when NPS matures after 60 years, you can withdraw only 60 per cent of the amount.

That means you will be able to withdraw around Rs 3 crore, while you will have to invest the remaining Rs 2 crore in an annuity plan.

Let us tell you that thanks to this annuity plan, you will continue to receive money throughout your life.

NPS: Can you withdraw money before retirement?

The maturity of NPS only happens after you turn 60 years old. In such a situation, you cannot withdraw NPS money before 60 years.

However, if you face any emergency or illness, some amount can be withdrawn for building a house or for children's education.

Keep in mind that the rules for withdrawing money can be changed at any time, so before withdrawing money, read the rules of NPS.

However, you should always try to withdraw NPS money only after retirement, so that you can spend your old age comfortably.