If you have just started a job and do not even have much money to invest, you can save Rs 50 per day and invest in NPS.
It is said that to earn money, you need money. However, it is also important to know where to invest the money so that it can give you good profits. If you want to earn money by staying risk-free then you have many investment options.
One of these is the New Pension System, which you can invest in to improve your old age. Even if you save Rs 50 per day in NPS, you will get Rs 34 lakh at the time of retirement. Investing in this is absolutely easy and low risk. Although it is important to note that NPS is a market-linked investment.
Under this scheme, money is invested in two places, Equity i.e. Stock Market and Debt i.e. Government Bonds and Corporate Bonds. You can decide how much NPS money will go into equity only during account opening. Usually, up to 75% of the money can go into equity. This means that in this you are expected to get slightly higher returns than PPF or EPF.
We are going to tell you that if you have just started a job, you do not even have much money to invest, then you can save Rs 50 per day and invest in NPS.
Suppose you are 25 years old at this time. If you invest Rs 1,500 per month in NPS, that is, Rs 50 per day and take retirement after 60 years, you will invest in it for 35 consecutive years. Now suppose you got a return at the rate of 10%. So when you retire, your total pension wealth will be Rs 34 lakh.
Start investing in NPS
- Age: 25 years
- Investment: Rs 1,500 per month
- Investment period: 35 years
- Estimated return: 10%
Bookkeeping of NPS Investments
- Total invested: Rs 6.30 lakh
- Total interest received: Rs 27.9 lakh
- Pension wealth: Rs 34.19 lakh
- Total tax saving: Rs 1.89 lakh
Now, you cannot withdraw all this money at once. You can withdraw only 60 percent of it and the remaining 40 percent you have to put in an annuity plan, from which you get pension every month. Suppose you put 40% of your money in an annuity. So you will be able to withdraw a lump sum amount of Rs 20.51 lakh and assuming the interest is 8%, then your monthly pension will be Rs 9,000.
Pension account
- Annuity: 40 percent
- Estimated interest rate: 8%
- Lump-sum amount received: Rs 20.51 lakh
- Monthly pension: Rs 9,111
Here, we started investing here at the age of 25. If you start investing early then your pension corpus is huge. The amount of pension depends on the amount you are investing monthly, at what age you have started investing and the returns you are getting. The example we have taken here is on estimated returns. It may be different in each case.
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