Why should you invest in National Pension System?
What is National Pension System?
NPS is an easily accessible, low cost, tax efficient, flexible and portable retirement savings account intended to enable the subscribers to make ideal decisions regarding their future through systematic savings during their working life. NPS seeks to instil the habit of saving for retirement among the citizens. It is an effort towards finding a sustainable solution to the problem of providing sufficient retirement income to every citizen of India.
Under NPS, individual savings are pooled into a pension fund which are invested by PFRDA regulated professional fund managers as per the approved investment guidelines in to the diversified portfolios comprising of Government Bonds, Bills, Corporate Debentures and Shares. These contributions would grow and accumulate over the years, depending on the returns earned on the investment made.
At the time of normal exit from NPS, the subscribers may use the accumulated pension wealth under the scheme to purchase a life annuity from a PFRDA empanelled Life Insurance Company apart from withdrawing a part of the accumulated pension wealth as lump-sum, if we choose so.
Below is the illustration expected corpus generated at retirement if the subscriber has started at the age of 25 and Rs 5000/Month and expected return of 10%.
Pension calculator illustrates the tentative Pension and Lump Sum amount an NPS subscriber may expect on maturity based on regular monthly contributions, percentage of corpus reinvested for purchasing annuity and assumed rates in respect of returns on investment and annuity selected for.
Why to invest in NPS?
- Exclusive Tax benefit
- Provides lumpsum corpus (60% of corpus generated) to subscriber at retirement including mandatory purchase of annunity plan (40% of corpus generated)for regular monthly pension.
- The entire 60% corpus withdrawn is Tax Free.
Looking to invest in National Pension Scheme? Click Here to start your investment in NPS.
