NPS calculator: Opening a National Pension Scheme (NPS) account is advised by most investment advisors as the NPS scheme is a unique investment tool that offers both equity and debt investments through a single investment. Experts advise this unique pension scheme for retirement planning as it allows the account holder to earn around 10 percent annual NPS interest without taking huge risks.
NPS calculator: Opening a National Pension Scheme (NPS) account is advised by most investment advisors as the NPS scheme is a unique investment tool that offers both equity and debt investments through a single investment. Experts advise this unique pension scheme for retirement planning as it allows the account holder to earn around 10 percent annual NPS interest without taking huge risks.
According to tax and investment experts, if the NPS account holder uses the full income tax exemption limit ₹1.5 lakh per year per month ₹12,500 in NPS contributions from the age of 25 and he could get around ₹2.94 lakh monthly pension after joining the elite club of senior citizens.
According to tax and investment experts, if the NPS account holder uses the full income tax exemption limit ₹1.5 lakh per year per month ₹12,500 in NPS contributions from the age of 25 and he could get around ₹2.94 lakh monthly pension after joining the elite club of senior citizens.
NPS rate in long term
Talking about the NPS interest one can get in the long term, Kartik Jhaveri, Head of Wealth, Transcend Capital said, “NPS account holders can invest up to 75 per cent in equities, but my suggestion to investors is to maintain 60 per cent equity and 40 per cent leverage. In the long term, one can expect equity exposure at least 12 percent return on debt risk 8 percent return. This means the NPS rate that can be expected in the long term by holding a debt-to-equity ratio of 60:40 would be more than 10 percent.”
NPS rate in long term
Talking about the NPS interest one can get in the long term, Kartik Jhaveri, Head of Wealth, Transcend Capital said, “NPS account holders can invest up to 75 per cent in equities, but my suggestion to investors is to maintain 60 per cent equity and 40 per cent leverage. In the long term, one can expect equity exposure at least 12 percent return on debt risk 8 percent return. This means the NPS rate that can be expected in the long term by holding a debt-to-equity ratio of 60:40 would be more than 10 percent.”
Kartik Jhaveri explained how the NPS rate would be around 10 percent over the long term: “Sixty percent equity position would yield 7.2 percent (12 x 0.6) while 40 percent debt would yield 3.2 percent 98 x 0.4. resulting in to an NPS rate of about 10.40 percent in the long term.”
Kartik Jhaveri explained how the NPS rate would be around 10 percent over the long term: “Sixty percent equity position would yield 7.2 percent (12 x 0.6) while 40 percent debt would yield 3.2 percent 98 x 0.4. resulting in to an NPS rate of about 10.40 percent in the long term.”
NPS calculator
That is, if the investor invests ₹12,500 per month, he could exhaust ₹1.50 lakh per annum Income Tax Exemption limit allowed by Income Tax Department while filing Income Tax Return (ITR). Assuming an equity debt risk ratio of 60:40, if an investor opens an NPS account at the age of 25 and continues to invest for the next 35 years, the NPS calculator suggests that the NPS account holder would receive a maturity ₹2.87 million and approx ₹95,707 per month from pension.
NPS calculator
That is, if the investor invests ₹12,500 per month, he could exhaust ₹1.50 lakh per annum Income Tax Exemption limit allowed by Income Tax Department while filing Income Tax Return (ITR). Assuming an equity debt risk ratio of 60:40, if an investor opens an NPS account at the age of 25 and continues to invest for the next 35 years, the NPS calculator suggests that the NPS account holder would receive a maturity ₹2.87 million and approx ₹95,707 per month from pension.
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Pension calculator
Pankaj Mathpal, CEO, Optima Money Managers, told how the maturity amount is used to increase the monthly pension: “A pensioner can expect a return of around 6 percent on his investment. But at the same time, if an NPS account holder uses his increased maturity amount after the age of 60, in SWP (Systematic Remover Plan), the monthly pension would increase manifold , as SWP would give an annual return of around 7 percent.
Pension calculator
Pankaj Mathpal, CEO, Optima Money Managers, told how the maturity amount is used to increase the monthly pension: “A pensioner can expect a return of around 6 percent on his investment. But at the same time, if an NPS account holder uses his increased maturity amount after the age of 60, in SWP (Systematic Remover Plan), the monthly pension would increase manifold , as SWP would give an annual return of around 7 percent.
Pension calculator
Pankaj Mathpal of Optima Money Managers said that if an NPS account holder invests this ₹2.87 million NPS withdrawal amount in SWP over the next 25 years, he would circle ₹1,98,926 or ₹This gives you 1.99 million monthly income ₹2.87 million investment in SWP. Like buying an NPS annuity would fetch ₹95,707 per month pension by adding this ₹1.99 lakh monthly income from SWP, the net monthly pension an investor can generate from NPS remains approx. ₹2.94 lakh ( ₹1.99 lakh + ₹0.95 lakh).
Pension calculator
Pankaj Mathpal of Optima Money Managers said that if an NPS account holder invests this ₹2.87 million NPS withdrawal amount in SWP over the next 25 years, he would circle ₹1,98,926 or ₹This gives you 1.99 million monthly income ₹2.87 million investment in SWP. Like buying an NPS annuity would fetch ₹95,707 per month pension by adding this ₹1.99 lakh monthly income from SWP, the net monthly pension an investor can generate from NPS remains approx. ₹2.94 lakh ( ₹1.99 lakh + ₹0.95 lakh).
When asked about the SWP plans that NPS account holders can look at, Pankaj Mathpal listed the following SWP plans:
When asked about the SWP plans that NPS account holders can look at, Pankaj Mathpal listed the following SWP plans:
1) ICICI Prudential Balanced Advantage Fund;
1) ICICI Prudential Balanced Advantage Fund;
3) Canara Robeco Equity Hybrid Fund.
3) Canara Robeco Equity Hybrid Fund.
Disclaimer: The views and recommendations expressed above are those of individual analysts or personal finance companies and not of Mint. We recommend investors to consult certified experts before making investment decisions.
Disclaimer: The views and recommendations expressed above are those of individual analysts or personal finance companies and not of Mint. We recommend investors to consult certified experts before making investment decisions.