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With the National Pension System (NPS), planning for your spouse’s financial needs during retirement becomes straightforward. A properly optimized NPS investment plan can provide your spouse with a monthly pension of around ₹45,000 and also build a retirement corpus of over ₹1.11 crore by 60.
Getting Started with NPS
The process of onboarding your spouse onto an NPS scheme is very straightforward and flexible. You can start with an investment of ₹1,000 with the option to contribute on a monthly or yearly basis. The NPS account matures at 60, but recent policies allow for this to be extended to 65.
Example: How Your Investment Grows
Let’s explore how an investment strategy works practically:
Starting age: 30
Investment duration: 30 years
Monthly contribution: ₹5,000
Estimated annual return: 10%
Assuming an annual return of 10%, investing ₹5,000 every month from age 30 to 60 would give your spouse a corpus of ₹1.12 crore at maturity. They will be able to withdraw approximately ₹44.79 lakh as a lump sum from this. The remaining corpus of ₹67.19 lakh can be invested in an annuity which would give a guaranteed monthly pension of ₹44,792 for life.
Summary of Pension Calculation:
Maturity total corpus amount: ₹ 1,11,98,471
Lump-sum withdrawal: ₹ 44,79,388
Amount for annuity purchase: ₹ 67,19,083
Estimated annuity rate: 8 %
Monthly Pension: ₹ 44,793
Additionally, they achieved low-risk investment.
NPS is a reliable scheme Nomenclature as provided by the Government of India and is regulated by Pension Fund Regulatory and Development Authority (PFRDA). Funded by the individual on a monthly basis, the funds are managed and supervised by professionals which guarantees consistent returns in relation to the stock market, which usually lies around 10%-11% annually.
Highly Attractive Tax Benefits
The benefits while investing in NPS are greatly availed due to taxation, thus elevating the benefits of the investment.
The traditional taxation system allows you to take benefits of up to ₹ 1.5 lakh by section 80C and an extra ₹ 50,000 by section 80CCD(1B) summing up to ₹ 2 Lakh per year.
The new taxation system allows deducting employer-contributed funds of upto 14%.
Take the First Step
Crafting a retirement plan for your spouse does not have to complicated. Keeping a strict strategy through NPS allows for long-term financial assurance and satisfaction. Start investing now to allow your spouse to enjoy a comfortable, self-reliant and carefree retired life.
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