You can easily increase your NPS return (indicative picture)
The National Pension System or NPS is a retirement scheme run by the Government of India. In this scheme, depositors are given regular income after retirement so that there is no difficulty in spending. This is a government-backed pension scheme, so there is no risk of losing money and there is every possibility of guaranteed returns. Tax and investment experts say that if a person deposits Rs 12,000 every month in this scheme, then he can get a pension of Rs 1.78 lakh in the future. For this, the depositor is advised to take Systematic Withdrawal Plan or SWP.
About the NPS scheme, Sebi Registered Tax and Investment Expert Jitendra Solanki tells ‘Mint’, an NPS account holder can decide to put 75% of the money deposited in his NPS account in equity. However, it is better that the depositor should put 60 percent in equities and 40 percent in debt funds. If an NPS account holder decides to invest NPS money on this basis, then he can get the benefit of interest up to 10% in the long term.
What do experts say
Jitendra Solanki says, if a depositor deposits Rs 12,000 every month in his NPS account for 30 years and chooses to put the amount in equity and debt in the ratio of 60-40, then as maturity the depositor will get Rs. 64,11,142 can be found. 54,704 will be received as monthly pension because the return on the money deposited in the annuity will be given at the rate of 6%. There will be some people who would like to invest 50% of the maturity amount of NPS in the annuity. In this situation, the monthly pension amount will reach Rs 68,330 while the amount of lumpsum withdrawal will be Rs 1,36,75,952.
Benefits of depositing in SWP
Experts recommend depositing this lumpsum amount in SWP. If this is done, then the pension of every month will increase even more. Amit Gupta, MD, SAG, says, if the maturity amount of Rs 1.36 crore received in NPS is deposited under SWP for 25 years, then a large amount will come in the form of pension at 8% interest. The depositor will continue to get Rs 1,02,464.455 per month for 25 years. If the depositor has put 40 percent of the NPS money in the annuity, then he will get Rs 1.64 crore as lumpsum. This 1.64 crore can be put in SWP for 25 years. After 25 years, the depositor will continue to get Rs 1.23 lakh every month at the rate of 8% interest.
How to get 1.23 lakh pension
If a depositor puts Rs 25,000 in NPS every month, deposits money for 30 years and maintains a 50-50 ratio of equity-debt to his account, he will get Rs 1.70 lakh per month on maturity. In this, Rs 68,330 will be available from annuity and 1.02 lakh from SWP. If Rs 12000 is invested in NPS and 40% is deposited in the annuity, then the account holder will get 1.78 lakh every month i.e. Rs 54,704 from annuity and Rs 1.23 lakh from SWP.
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