Know Your Annual NPS: How much should you invest to get a monthly pension of Rs 1 lakh; know here

NPS Annuity Calculator: The National Pension System (NPS) has two phases- wealth accumulation and withdrawal. In a market-oriented retirement-oriented plan, an NPS subscriber can invest from the age of 18 to 75 years. At the age of 60, he has the opportunity to withdraw the amount of money from his pension company and buy an annuity plan. However, they can withdraw only 60 percent of their corpus.

For the rest of the 40 percent, they need to buy a pension plan.

The profit from the annuity investment helps them to get monthly pension.

If a senior citizen has reached their retirement goals and does not need a lump sum of 60, they can buy an annuity worth 100 percent of their retirement corpus.

Returns from annuities can vary, and can range between 5.25 percent and 9.25 percent.

NPS has 5 types of pension. For each pension, the monthly income is different for the NPS subscriber.

Know what are the 5 categories of NPS pension and what should be the minimum amount of pension to get minimum monthly pension of Rs 1 lakh in all.

Types of NPS pensions

The 5 types of annuity offered to NPS subscribers are annuity for life with return on purchase (ROP), annuity for life without ROP, joint life annuity with ROP, joint life annuity without ROP, and family income through ROP.

How to calculate the value of an annuity

In calculating the pension, we will take the example of a private sector worker aged 60 and his spouse aged 58.

We take all NPS annuity subscribers to count them (source NSDL official website).

Minimum amount for NPS monthly pension is Rs 1 lakh for all categories

The minimum monthly pension of Rs 1 lakh is currently Rs 1,71,00,000 (Rs 1.71 crore).

See, how much is the monthly pension and the minimum amount in different categories of money that can help a person to receive.

Monthly pension in life pension with ROP

In this category of NPS pension, the annuity stops on the death of the annuitant, and the purchase price (ROP) is returned to the annuitant’s nominee.

A pension purchase of Rs 1,71,000,00 will help a person to get a monthly pension of Rs 1,00,671.12, and a minimum monthly pension of Rs 88,325.61.

Monthly pension in life pension without ROP pension

Here, the annuity ends on the death of the annuitant, and the purchase price is not returned to the nominee.

A purchase of Rs 1,71,000.00 in this category will help a person to get a maximum pension of Rs 1,32,408.00 and a minimum pension of Rs 1,07,909.

Monthly pension in joint life annuity and ROP

In this category, the pension amount is paid to the spouse during his/her lifetime, and the ROP is returned to the nominee after the death of the spouse.

For an annual income of Rs 1,71,000,00, the maximum monthly NPS pension for this category is Rs 1,00,499.00, and the minimum is Rs 88,190.30.

Monthly pension in joint life annuity without ROP

In this category of NPS pension, on the death of the pensioner, the pension is paid to the surviving spouse. If the spouse outlives the pension, the pension will stop after the death of the pensioner.

For the purchase of Rs 1.71 crore annuity, the maximum monthly NPS pension available under this category is Rs 1,16,983.00, while the minimum is Rs 94,158.

Monthly pension on family income through ROP

In this category of NPS pension, on the death of the pensioner, the spouse gets a monthly pension for the rest of his life. After the death of the spouse, the pension goes to the living mother and father of the deceased pensioner.

After all these family members are covered, the pension ends, and the full payment is returned to the surviving children or legal heirs of the pension.

A purchase of Rs 1,71,000,00 in this category will provide a monthly NPS pension of Rs 1,00,499.00 and a minimum pension of Rs 87,165.

Monthly NPS pension on purchase of Rs 1.71 cr annuity