NPS Tips: By investing small amounts, you can accumulate Rs 5 crore by the time of retirement..

Many people do retirement planning, but the timing of most people goes wrong. For retirement planning, you have to think not in old age, but in youth. You have to think about how much money is needed and where to invest the money so that you get strong returns. Keep in mind that the sooner you start investing, the less you will have to invest every month, and the more returns you will get. The best option for retirement planning is NPS (National Pension System), by investing a little bit, you can deposit Rs 5 crore (how to get rs. 5 crore on retirement) till retirement. Let us know how you can get a pension of Rs 2.5 lakh on retirement.

What is the formula for depositing Rs 5 crore?

First of all, you need to understand that this formula does not apply to everyone. This formula will apply only to those youth who have recently started a job. Let's assume that you want to save Rs 5 crore on retirement i.e. at the age of 60 and you got a job before the age of 25. If you start saving Rs 442 every day from your salary from the age of 25 and invest it in NPS, then you will easily have Rs 5 crore on retirement.

How will Rs 442 a day become Rs 5 crore?

If you save Rs 442 every day, it means that you will have to save about Rs 13,260 every month. If you start investing from the age of 25, then you will invest for 35 years till the age of 60. If you have invested this money in NPS, then you will get an average interest of 10 percent there. In this way, with the compounding interest, your money will become Rs 5.12 crore at the age of 60.

This will happen with the power of compounding.

If you invest Rs 13,260 every month in NPS, then in 35 years you will invest a total of Rs 56,70,200. Now the question arises that if the investment is Rs 56.70 lakh, then where will the Rs 5 crore come from? This will be possible with the power of compounding. Under this, you will not only get interest on your principal every year but also on the interest received on that principal. In such a situation, by the time you deposit Rs 56.70 lakh for 35 years, you will have received interest of Rs 4.55 crore. In this way, your total investment will become Rs 5.12 crore.

Will you have Rs 5.12 crore in hand on retirement?

It would be wrong to say that you will have Rs 5.12 crore in hand on retirement. This is because, after 60 years, when the NPS matures, you can withdraw only 60 percent of the amount. That is, you will be able to withdraw about Rs 3 crore, while the remaining Rs 2 crore will have to be invested in an annuity plan. Let us tell you that due to this annuity plan, you will keep getting money throughout your life.

Can you withdraw money before retirement?

NPS matures only after you turn 60 years old. In such a situation, you cannot withdraw NPS money before 60 years. However, if you face any emergency or for any illness, building a house, or children's education, some amount can be withdrawn. Keep in mind that the rules for withdrawing money can be changed at any time, so read the rules of NPS before withdrawing money. However, you should always try to withdraw NPS money only after retirement, so that your old age can be spent comfortably.

About two and a half lakh rupees will come in hand every month.

If you invest the entire corpus in an annuity plan, you will get a lot of money every month. Suppose you will easily get an interest rate of 5-6 percent. In this case, on Rs 5.12 crore, you will get Rs 25.60- 30.72 lakh annually. That means every month you will get Rs 2.13-2.56 lakh as salary.