The National Pension System is one of the safest ways of creating retirement corpus. If you are looking to create a retirement corpus to get Rs 1 lakh as monthly income, then this article is for you.
Here we will discuss the how to attain a monthly pension of 1 lakh rupees in India through NPS.
Rs 1 lakh with national pension system
To secure financial independence during retirement, it’s essential to invest in a retirement scheme that guarantees a steady income upon reaching retirement age.
The National Pension Scheme (NPS) is one of the most effective tools in the country to meet that requirement. NPS gives you the luxury of having a lump sum at retirement age and a regular monthly income afterward.
Since NPS provides compounding returns, a long investment period will grow your income faster.
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NPS: How to get Rs 1 lakh as pension per month?
By initiating an investment of Rs 3,475 per month in NPS at the age of 18 and maintaining it for the ensuing 47 years, you can potentially secure a pension exceeding Rs 1,00,000 per month upon reaching the retirement age of 65 years.
Apart from this, you can customise your investment portfolio, and allocate 60% of your funds to equities and 40% to debt instruments. With this diversified blend, you can get returns of around 10%.
Now if you are planning for long term, say you want to retire after 30 years, you need to contribute Rs 15,000 each month into your NPS account to achieve a pension of 1 lakh.
Additionally, you should note that 60% of the retirement fund is allocated to an annuity plan, which offers an annual return of 6%.
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NPS: Rs 1 lakh pension per month
If you are planning to retire in 20 years, you need to contribute roughly around Rs 32,000 per month, assuming 12% return rate to build a similar retirement corpus within a shorter time frame.
