Achieve a Monthly Income of 50,000 with National Pension Scheme (NPS) | A Reliable Retirement Savings Scheme

by Retirement Advisor | Jun 22, 2023 | Retirement Pension | 6 comments

Retirement Saving Scheme NPS: If you want to get a monthly pension of Rs 50,000 from NPS, you need to back-calculate the corpus requirement based on the 40% annuity rule. If you only use the mandatory 40% NPS corpus for purchasing annuity, then at an annuity rate of 6%, you need a Rs 2.5 crore NPS corpus. Of this, 40% or Rs 1 core will be used for purchasing annuity. This annuity (at 6%) will generate Rs 6 lakh yearly or Rs 50,000 monthly pension. Remember, this is when only 40% corpus is used for annuity purchase. You then also get Rs 1.5 crore (remaining 60%) as lump sum tax-free withdrawal. The numbers will change for different annuity rates. Watch the video to know how to make 50,000/month from NPS

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How To Earn 50,000/month From National Pension Scheme (NPS) | Retirement Saving Scheme

The National Pension Scheme (NPS) is a government-backed retirement saving scheme in India. It was introduced in 2004 with the objective of providing income to individuals during their retirement years. The NPS offers investors the opportunity to grow their funds over a long-term period and earn a significant amount of money per month after retirement.

Here are some key steps to earn 50,000 rupees per month from the National Pension Scheme:

1. Start Early and Contribute Regularly: The sooner you start investing in the NPS, the more time your money has to grow. Regular contributions to the scheme will increase the corpus available at the time of retirement. The minimum contribution required per year is 1000 rupees, but it is advisable to contribute more to accumulate a substantial amount.

2. Choose the Right Pension Fund Manager: When joining the NPS, you have the option to choose from several Pension Fund Managers (PFMs) who will manage your investments. Research each PFM’s performance, historical returns, and investment strategy before making a decision. Opt for a PFM that has consistently delivered higher returns over the long term.

3. Diversify Your Portfolio: The NPS allows you to choose between three investment options: Equity, Corporate Debt, and Government Securities. It is advisable to invest in a mix of these options to diversify your portfolio. By spreading your investments across different asset classes, you can mitigate risk and potentially earn better returns.

4. Opt for Active Choice: In the NPS, you have the choice to either go for the default auto-allocation option or the active choice option. The former automatically allocates your funds based on your age, while the latter allows you to decide the asset allocation yourself. Opting for the active choice enables you to have more control over your investments and potentially earn higher returns.

5. Stay Invested until Retirement: The NPS is a long-term retirement saving scheme, and it is important to stay invested until your retirement age. Exiting the scheme prematurely may result in penalties and could hinder your goal of earning 50,000 rupees per month. Consistency over time will allow your investments to benefit from compounding, thus boosting your final corpus.

6. Monitor and Review: Regularly monitor the performance of your investments and review your asset allocation. The market conditions and your financial goals may change over time, so adjust your portfolio accordingly to maximize returns. Stay updated on any changes made by your PFM and make informed decisions based on your risk appetite and long-term goals.

The National Pension Scheme offers individuals a golden opportunity to accumulate wealth for their retirement years. By following these steps and being disciplined in your investment approach, earning 50,000 rupees per month from the NPS is a realistic goal. Remember, it is essential to start early, choose the right investment options, diversify your portfolio, and stay invested until retirement. With consistent efforts and proper management, you can secure a prosperous financial future through the NPS.

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6 Comments

moneycontrol on June 22, 2023 at 10:45 am
Also watch: National Pension Scheme withdrawal rules, partial exit & taxation
https://www.moneycontrol.com/news/business/personal-finance/national-pension-scheme-withdrawal-rules-partial-exit-taxation-8996031.html
Vikas Kadam on June 22, 2023 at 10:45 am
Hi Team Money Control, the bases explained is not worth. Let me share the ex which you shared Age 45 & 65k monthly for 15years come to Rs1170000 in total and if you survive max 80 which is 20year after retirement will come to Rs48750/month, than what about the profit and benefit how long you need to survive 80+ ? …So enjoy karo aur NPS booljao
anubhav srivastava on June 22, 2023 at 10:45 am
Mother of all is PPF .
Gianetan Sekhon on June 22, 2023 at 10:45 am
FD achhi hai. 5% dream returns for sure 😉
Legacy Finance on June 22, 2023 at 10:45 am
SWP is far better than NPS.
One can do SIP in a good ELSS fund where returns are far superior & then at retirement put that accumulated corpus in SWP mutual fund to generate good pension for self.
Tiyyagura Prabhakarareddy on June 22, 2023 at 10:45 am
With the same amount if we purchase SBI share for those period.we will get.monthly 1lk .