NPS: Invest Rs 5000 per month, get Rs 2 lakh monthly pension from THIS govt scheme-- Check return calculator, benefits, other details here

Those working in the private sector often find it hard to accumulate a big fund for their post-retirement life. Given the inflation, one needs a risk-free investment instrument that yields an inflation-beating return in the long run. While there are many such instruments in the market, some of them are Fixed Deposits, Public Provident Funds (PPF) and National Pension System (NPS). NPS is a voluntary retirement savings scheme laid out to allow the subscribers to make a defined contribution towards planned savings thereby securing the future in the form of a Pension. It is an attempt towards a sustainable solution to the problem of providing adequate retirement income to every citizen of India. Continue reading to find out how you can get Rs 2 lakh monthly pension by just investing Rs 5,000 per month.

The National Pension System is a defined contribution retirement savings scheme administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA). The pension cum investment scheme provides old age security to Indian citizens. It brings an attractive long term saving avenue to effectively plan your retirement through safe and regulated market-based return.

Any individual citizen of India (both resident and Non-resident) in the age group of 18-70 years (as on the date of submission of NPS application) can join NPS. Although, opening multiple NPS accounts for an individual is not allowed under NPS, an Individual can have one account in NPS and another account in Atal Pension Yojna.

An additional deduction for investment up to Rs 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs 1.5 lakh available under section 80C of Income Tax Act 1961.

As per a rough NPS calculator estimate, if someone begins depositing Rs 5,000 per month in NPS for 40 years, he/she will get Rs 1.91 crore. Assuming you start investing at the age of 20, you will receive around Rs 1.91 crore in a lump sum maturity payment and Rs 1.27 crore in annuity value, which will be reinvested in annuities for monthly pension. Therefore, assuming a 6% annual return on an annuity valued at Rs. 1.27 crore, the monthly pension would be Rs. 63,768. The investor will continue to get Rs 63,768 per month from annuity till he/she is alive.

If you invest the above stated money i.e Rs 5000 per month from the age of 20 years till retirement, you will get a one-time maturity amount of Rs 1.91 crore to Rs 1.27 crore, wherein a 6 percent calculated return of Rs 1.27 crore would stand at Rs 63,768 per month.