Retirement is an important phase of life where one can enjoy the fruits of their hard work. After years of dedicated work, it's time to relax and live a stress-free life. For this, a sound pension plan is imperative. In India, a monthly pension of 20k is considered a good amount to live a comfortable life after retirement. But how can one achieve this? Let's discuss some ways in which you can achieve a monthly pension of 20k after retirement.
Peaceful Post-Retirement Life
Tax Free Regular Income
Wealth Generation to beat Inflation
Invest ₹6,000/month & Get Tax Free Monthly Pension of ₹60,000
Get the best returns & make the most of your golden years
It's never too early to start retirement planning. The earlier you start, the more time you have to accumulate the desired corpus. Starting early gives you the benefit of compounding and also reduces the burden of saving a large amount in a shorter period.
There are various government-run retirement schemes, such as the Employees' Provident Fund (EPF), National Pension System (NPS), and Public Provident Fund (PPF), which offer decent returns and tax benefits. You can opt for these schemes and start investing in them as early as possible to accumulate a substantial amount.
Investing in equity can be a good option if you have a high-risk appetite. Equity investments can offer higher returns over the long term and can help you achieve your goal of a 20k pension monthly. However, it's important to be cautious and seek professional help if necessary.
The government offers tax benefits for investments made toward retirement. Make use of these benefits to reduce your tax burden and maximize your savings.
Increasing your monthly contributions towards your retirement corpus can help you reach your goal faster. You can start with a small increase and gradually increase it over time.
Pension annuity plans offer a fixed monthly pension after retirement. These annuity plans can be a good option for those who want a guaranteed income after retirement.
It's important to plan your expenses carefully and maintain a balanced lifestyle. Avoid unnecessary expenses and prioritize your savings to achieve your goal of a 20k pension monthly.
By using a pension calculator, you can get an idea of how much you need to save each month to reach your desired retirement income goal. By regularly reviewing your results and making adjustments to your savings plan, you can ensure that you are on track to achieve your retirement goa
A national pension system calculator is a tool that helps individuals estimate the amount of retirement savings they need to accumulate to maintain their standard of living in their golden years, so an individual can chose the best pension plan as per their requirement. This calculator takes into account a number of factors, such as current age, retirement age, current salary, expected inflation rate, and expected return on investment.
To use a pension calculator, here are the steps:
Input your current age
Input your expected retirement age
Input your current salary
Input your expected inflation rate
Input your expected return on investment
The calculator will then estimate the amount of retirement savings you need to maintain your standard of living
Keep track of your progress towards your retirement goals and make adjustments to your savings and investment strategies as needed.
The benefits of using a pension calculator in 2024 are:
There are various options for individuals to invest in a variety of asset classes, including equity, fixed income, and government securities. The calculator can help individuals understand the different investment options available and make informed decisions about where to invest their retirement savings.
By taking into account various factors such as current age, retirement age, current salary, expected inflation rate, and expected return on investment, a national pension calculator can provide an accurate estimate of the amount of retirement savings an individual needs to accumulate.
By using the calculator regularly, individuals can keep track of their progress toward their retirement goals and make adjustments to their savings and investment strategies as necessary.
The calculator eliminates the need for manual calculations, making it a faster and more efficient way of estimating retirement savings.
The National Pension System (NPS) is a government-sponsored scheme that provides citizens with a secure retirement savings option. Using the calculator to plan for retirement through the NPS can give individuals peace of mind knowing that their savings are protected and managed by the government.
An investment of Rs. 20,000 per month, if made wisely, can easily provide a monthly pension after retirement. One can explore various investment plans to secure a steady income of Rs. 20,000.
The National Pension Scheme (NPS) is a government-supported, voluntary retirement plan managed by the Pension Fund Regulatory and Development Authority (PFRDA). Investors can contribute a portion of their monthly income to the NPS account during their working years. Upon retirement age, they can withdraw up to 40% of the accumulated funds, while the remaining 60% must be invested in an annuity.
Example
Let us understand how to get a 20k pension per month if the investment is made in an NPS scheme through the following example:
Mr. Rahul is 30 years old and wishes to contribute to his NPS scheme till the age of 60 years. Assuming that the expected rate of return on the investment is 10%:
The monthly amount of Rs. 7,000 needs to be invested for the next 30 years till 60 years of age.
The total invested amount will reach Rs. 25,20,000 after 30 years.
The total corpus will be around Rs. 1.59 crores.
It is known that under NPS, a minimum of 40% of the accumulated sum is invested in an annuity. The annuity value is now around Rs. 63.82 lakhs approximately.
Expecting an annuity rate of 6%, an investor will receive a pension amount of Rs. 30,000 approximately per month from the NPS scheme.
For those who seek both insurance and investment benefits, Unit Linked Insurance Plans (ULIPs) are the ideal solution. These plans offer a combination of wealth creation and protection for the insured's family in the event of their unexpected death. This combination of benefits has led to ULIPs being increasingly popular and considered a top investment choice for those who are comfortable taking on moderate to high levels of risk.
The investment amount in the ULIP is divided into 2 parts:
One part of the premium is to provide life insurance coverage.
The other part of the premium is used for debt and equity funds investments to reap financial benefits.
Before determining the investment amount in a ULIP plan, it is important to consider the financial objectives of the investor.
A ULIP plan offers numerous benefits, such as easily switching funds, a diverse portfolio, and selecting funds based on personal preference.
Example
An investor needs to invest somewhere around Rs. to get a 20k pension per month under a ULIP plan. Rs. 7,000 to Rs. 9,000 per month for a period of 10 years and stay in the plan for a total of 20 years. At the end of the tenure, a lump sum payout of Rs. 77 lakhs will be generated.
Fixed Deposits, a popular investment option offered by Indian banks and other financial organizations, provide a substantial FD interest rate over a fixed time frame ranging from 7 days to 10 years. When opening a Fixed Deposit, the interest rate remains unchanged and is not affected by any changes in the financial market as it is not linked to it.
Purchasing a Fixed Deposit from any authorized bank or financial organization is incredibly simple. Calculating the returns can also be done with ease using FD calculators.
An individual can deposit a one-time lump sum of money into their FD account for a duration that ranges from 7 days to 10 years and receive a reasonable return at the end of the investment period.
Example
If Rs. 1 lakh is invested at the rate of 6.5% per annum in an FD for 10 years, the estimated return value on the investment will be approximately Rs. 90,000, making the maturity amount Rs. 1,90,000 approximately at the end.
Insurance companies typically offer these plans to ensure that investors receive a predetermined amount of money each year after they retire. They are designed to help individuals save for their retirement while providing peace of mind through the guarantee of a steady income stream.
It is important to thoroughly research and understand the terms and conditions of these plans before investing, as the guarantee of a fixed rate of return may come with trade-offs, such as lower returns and limited flexibility.
To receive a monthly pension of 20,000, you will need to plan for and make strategic decisions about your financial future. Options for achieving this level of pension may include regularly contributing to a retirement savings plan or an individual retirement account (IRA), investing in stocks, bonds, or mutual funds, and consulting with a financial advisor to develop a comprehensive retirement strategy.
Additionally, you may consider working for an employer that offers a generous pension plan or taking advantage of government benefits.
It's important to start planning for retirement as early as possible and to regularly review and adjust your plan as necessary to ensure that you have the financial stability and security you need in your later years.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance
plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
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