NPS Vatsalya Calculator: Can your child get Rs 30 crore retirement corpus with just Rs 2,000/month contribution; understand it through calculation
NPS Vatsalya Calculator: The NPS Vatsalya account is for minors in the 0-18-year age group. At 18 years of age, the NPS Vatsalya account holder can convert their NPS Vatsalya account into a normal NPS account.
NPS Vatsalya Calculator: Retirement planning is slowly getting popularity among new-age investors. However, still, very few people start their retirement planning in their mid- or late-20s. Still, a lot of people start retirement planning in their mid-30s or early-40s. But retirement planning for a newborn is still an uncommon concept. But what can be the benefit of starting retirement planning at an age when parents should think about the child's upbringing? In investment, the early starter always gets an edge over a person who starts late. Starting early gives them one year of compounding on their investment. So, even if they start with a small amount, their corpus can be quite large when they reach the retirement age. Minors entry into National Pension System (NPS) Vatsalya provides them with an opportunity to build a sizeable corpus with a small monthly investment. Know more about the scheme and what will be the retirement corpus if one invests Rs 2,000 monthly for a span of 60 years.
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What is NPS Vatsalya?
It is an extension of the NPS scheme, where minors can also have their own NPS account named NPS Vatsalya.
Minimum and maximum age for NPS Vatsalya account holders
The account can be opened for a newborn, while the maximum age is 18 years.
Who owns NPS account?
Parents/guardians can open an NPS Vatsalya account on behalf of minors. The account will be opened in the name of the minor, and a Permanent Retirement Account Number (PRAN) will also be issued to them.
Minimum deposit to open NPS Vatsalya
The account can be opened with a minimum deposit of Rs 1,000. The account holder needs to deposit the same amount every year to keep that account active.
Does NPS Vatsalya allow lump sum or monthly deposit?
One can opt for any number of lump sum deposits in a year, or they can opt for NPS Vatsalya.
What is the equity exposure in NPS Vatsalya?
The equity exposure in NPS Vatsalya can be up to 75 per cent.
Will NPS Vatsalya account be operational for life?
The account will be valid only till 18 years of age. After the account will be converted into a normal NPS account. The account holder can continue investing till 75 years of age. However, at 60 years of age, they will get the option to withdraw corpus up to 60 per cent.
Can 100% corpus be withdrawn from NPS Vatsalya?
Only 20 per cent corpus can be withdrawn at 18 years of age. The rest 80 per cent will be used to purchase an annuity plan. However, if the total corpus is less than Rs 2.50 lakh, the NPS Vatsalya subscriber can withdraw their entire 100 per cent corpus.
NPS Vatsalya: Retirement corpus calculation
For calculation, we are taking the assumed rate of return as 13% in line with PFRDA’s assumptions of 12.86 per cent (75 per cent equity and 25 per cent G-Sec).
NPS Vatsalya: Retirement corpus on Rs 2,000/m contribution till 18 years of age.
In an NPS Vatsalya account, till 18 years of age, the total contribution will be Rs 4,32,000, and the estimated corpus will be Rs 15,83,771.
NPS Vatsalya: Retirement corpus on Rs 2,000/m contribution till 60 years of age
But if one converts it into a normal NPS and keeps investing Rs 2,000 every month till 60 years of age, the investment will be Rs 14,40,000, and the expected corpus will be Rs 30,17,93,424.