By Anshul
CNBC-TV18.com
Published May 22, 2024
NPS provides subscribers with the flexibility to allocate their investments across different asset classes.
Kurian Jose, CEO of Tata Pension Management provides a detailed example to illustrate how individuals can secure a substantial monthly pension using NPS.
Consider a 30-year-old who starts investing ₹5,000 per month with a balanced allocation of 50% in equities and 50% in government and corporate bonds.
Assuming a 6% annual increase in contributions and a 10% return on investment, the corpus grows to approximately ₹1.85 crore by the time the investor turns 60.
Opting for a 100% annuity can provide a monthly pension of ₹1,05,292 for life.
In the event of the subscriber's demise, the pension would continue for the spouse, and the principal corpus would be available to the nominee.
NPS offers various calculators, including those from Tata Pension Management, to help investors visualise their retirement corpus and potential pension.