NPS Vatsalya Calculator: How one can take NPS retirement corpus from Rs 6.16 crore to Rs 47.70 crore? Understand it through this calculations
NPS Vatsalya Calculator: In NPS Vatsalya scheme, parents/guardians of minors 0-18 years of age can invest. The account is opened in the name of the minor and they also get the Permanent Retirement Account Number (PRAN).
NPS Vatsalya Calculator: National Pension System (NPS) was earlier restricted to adults, but the government has now opened it to minors for the first time since the inception of the scheme. The scheme was launched for government employees in 2004. But Centre allowed private sector employees, self-employed, and individuals in 2009. The scheme's nature of market-linked return has generated higher returns than interest-focused retirement schemes, as per the government data. As a result, a lot of new-age investors seeking to create a sizeable retirement corpus are opening their accounts in NPS. With the government opening NPS' gate to minors, crores of Indians are expected to join the scheme. In this write-up, know more about NPS Vatsalya and how a Rs 5,000 monthly contribution can take the retirement corpus from Rs 6.16 crore to Rs 47.70 crore if one invests for 18 extra years in NPS Vatsalya.
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What is NPS Vatsalya?
In the NPS Vatsalya scheme, parents/guardians of minors 0–18 years of age can invest on their behalf. The account is opened in the name of the minor, and they also get the Permanent Retirement Account Number (PRAN).
Who will operate NPS Vatsalya account?
Though the account will be opened in the name of the minor, it will be operated by the guardian/parent.
What will happen to NPS Vatsalya account when minor turns 18?
At 18 years of age, the parent/guardian can withdraw up to 20 per cent lump sum corpus, but they need to purchase the annuity from the rest of 20 per cent.
What will happen to NPS Vatsalya account when minor turns 18?
Or if they want, they can continue NPS investments. In that case, the NPS Vatsalya account will be converted into a normal NPS account.
Is partially withdrawal allowed in NPS Vatsalya?
After a lock-in period of 3 years, 25 per cent of contributions (excluding returns) can be partially withdrawn.
How is NPS Vatsalya different from normal NPS?
There is not much difference. The only benefit is that if one starts investing early (in NPS Vatsalya), because of compounding returns, they can build a much larger corpus than someone who is starting NPS contributions at 18.
What will be NPS corpus at Rs 5,000/m investment from 18-60 years?
Investment in 42 years will be Rs 25,2000. At 12 per cent annualised NPS returns, estimated gains will be Rs 5,90,37,466 and the estimated retirement corpus will be Rs 6,15,57,466.
What will be NPS corpus at Rs 5,000/m investment from 0-60 years?
Investment in 60 years will be Rs 36,00,00. At 12 per cent annualised NPS returns, estimated gains will be Rs 47,33,33,453 and the estimated retirement corpus will be Rs 47,69,33,453.
What will be the benefit of starting early?
In our projections, you can see that the investment in 18 years is just Rs 10.80 lakh more, but 18 years of extra compounding can help one get Rs 41,53,75,987 extra.
Disclaimer
These are projections and not investment advice. Do your own due diligence or consult an advisor for retirement planning.