NPS Calculator: How much to invest in NPS for Rs 5 lakh monthly pension? Check calculation

NPS Calculator: The National Pension System (NPS) has gained recognition as a prominent retirement planning instrument for employees in both the public and private sectors across the nation. It is specifically designed to promote long-term savings for retirement, offering an effective means to accumulate a pension corpus.

For individuals seeking to secure a pension through investment, the NPS presents a feasible option. A notable advantage of this financial vehicle is the absence of limits on the investment amount. Let us examine the savings necessary to attain a monthly pension exceeding Rs 5 lakh.

What Makes NPS Unique?

The NPS is a government-supported retirement savings initiative that enables individuals to create a retirement corpus while benefiting from tax advantages. A significant characteristic of the NPS is its flexibility, allowing investors to choose a mix of equity and debt investments based on their risk tolerance.

Another compelling aspect of the NPS is its cost-effectiveness. The scheme boasts some of the lowest fund management fees among retirement plans. This, coupled with the benefits of compounding over an extended period, renders the NPS an attractive choice for those aiming to build wealth for their retirement years.

Also Read: SIP Calculator: How much Rs 5,000 monthly investment will grow in 20 years?

Calculation with Illustrations

Let’s understand the same with an example. Suppose you are 30-year old and you start saving Rs 39,000 per month in your NPS account, continuing this until you reach the age of 65. That means your total contribution will be spread over 35 years. With an expected annual return of 12% and 40% of your corpus going toward an annuity with an anticipated 6% return, you could expect a monthly pension of slightly over Rs 5 lakh through your NPS investment.

Now, let’s consider what happens if you start investing at the age of 40. If you contribute Rs 1.35 lakh per month until you turn 65, making a total contribution over 25 years, with an expected return of 12% and 40% of the corpus invested in an annuity at a 6% rate, you would still manage to secure a monthly pension of slightly over Rs 5 lakh.

You would need a bigger investment amount at age 40 as your total contribution years will be reduced to only 25 years.

 » Read More

Related Articles

GCCs, IT companies dominate office space

Quarterly transactions in the office market reached a historic high of 28.2 million square feet in the January-March period, shows a Knight Frank report.  Global capability centres (GCCs) were the largest consumers of office space during the period, accounting for 44% of the total transaction volume.  A resurgence in demand from the third-party IT services

Gems and jewellery units to take a big hit

The reciprocal tariff of 27% will jack up customs duties faced by Indian exporters of studded and gold jewellery in the US to 32-34%, including 5.5-7% extant tariffs. Diamond products which currently do not have any tariffs, will cost US importers a 27% import duty. Sabyasachi Ray, Executive Director of the Gems & Jewellery Export

Some pain & some gain: India Inc counts the cost

Corporate India is gearing up for a challenging trade environment in the wake of the 27% reciprocal tariffs imposed by the US on Thursday. While the Trump administration has described the move as its moment of liberation, India Inc leaders feel there are some pain as well as some gain. From India’s perspective, key sectors

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
0FollowersFollow
0SubscribersSubscribe
- Advertisement -

Latest Articles

GCCs, IT companies dominate office space

Quarterly transactions in the office market reached a historic high of 28.2 million square feet in the January-March period, shows a Knight Frank report.  Global capability centres (GCCs) were the largest consumers of office space during the period, accounting for 44% of the total transaction volume.  A resurgence in demand from the third-party IT services

Gems and jewellery units to take a big hit

The reciprocal tariff of 27% will jack up customs duties faced by Indian exporters of studded and gold jewellery in the US to 32-34%, including 5.5-7% extant tariffs. Diamond products which currently do not have any tariffs, will cost US importers a 27% import duty. Sabyasachi Ray, Executive Director of the Gems & Jewellery Export

Some pain & some gain: India Inc counts the cost

Corporate India is gearing up for a challenging trade environment in the wake of the 27% reciprocal tariffs imposed by the US on Thursday. While the Trump administration has described the move as its moment of liberation, India Inc leaders feel there are some pain as well as some gain. From India’s perspective, key sectors

Dusit to expand presence in India, eyes emerging cities

Dusit International, a leading Thai hotel and property development company, on Thursday announced plans to expand its presence in India by launching its luxury and upper-midscale brands in key emerging markets.  The strategic expansion plan builds on the momentum of Dusit’s recent foray into the Indian market with the soft-opening of the contemporary and upscale

FMCG firms expect mixed show in Q4

The quarterly updates of fast-moving consumer goods (FMCG) companies, which has been released so far for the January-March 2025 period (Q4FY25), present a mixed picture of the sector at a time when urban demand has remained weak. Rural demand, in contrast, has been resilient and is expected to improve in the coming months. While Marico