NPS: Get Rs 2 lakh monthly pension by investing just Rs 5,000 per month; Check return calculator, tax benefits

New Delhi: Your retirement savings could be eaten away by inflation like termites as the cost of daily used commodities is increasing day by day. It is always more convenient to get a monthly payment into your bank account as an addition to your retirement savings. Are you also worried about old-age expenses? Read on to find out the right way to your concern.

One of the safest and best options for the aforementioned goals is the government-backed equity-linked National Pension Scheme (NPS). The government created this pension-cumulative investment structure to give its people stability as they age. The NPS offers an enticing long-term saving channel for effectively planning your retirement through safe and regulated market-based returns. (Also Read: LIC Policy: Want to become crorepati? Get Rs 1 crore by just paying premium for 4 years)

The scheme consists of both equity and debt instruments. Through NPS, you can annually save tax up to Rs 2 lakh. 

Pension calculator

By depositing Rs 5000 per month for 40 years, you will get Rs 1.91 crores. If you opt to invest the maturity amount, you will get a monthly pension of Rs 2 lakh. Rs 1.43 lakh from the return and Rs 63,768 from the Systematic Withdrawal Plan (SWP) work out to the aforementioned monthly pension. The investor will get a monthly pension of Rs 63,768 till the date he/ she is alive.

If the investor opts to invest Rs 5000 every month for 20 years, he/she will get a lump sum maturity amount of Rs 1.27 crores. After investing the maturity amount, you can get a monthly pension of Rs 63,768 per month, offering a return of approx 6 percent.

For the unversed, there are two types of NPS, NPS Tier 1, and NPS Tier 2. The minimum investment amount in Tier-1 is Rs 500 while in Tier-2 is Rs 1000. However, there is no maximum limit for investment.

Disclaimer: This article is for information purposes. The calculator is also mostly based on assumptive figures to give an example of a certain type. The article does not intend to give any financial advice of any sort. Investors/subscribers must check with their portfolio managers before investing in any scheme/policies.