New Delhi. National Pension Scheme (NPS) is a great retirement scheme for every Indian citizen, available for people between the ages of 18 and 70. Whether you are a government employee, working in the private sector, or an NRI, this scheme is an easy and effective option to secure your future. The aim of this scheme is to provide regular monthly pension and a large lump sum amount after retirement.

If planned correctly, NPS helps you gain financial independence even after retirement. For example, Suresh, aged 40, chose NPS for his retirement planning. With the help of a financial advisor, he planned to invest ₹20,000 monthly over a period of 20 years, which will give him a lump sum amount of ₹1.62 crore with a monthly pension of around ₹1 lakh at the age of 60. NPS not only gives better returns but also helps in tax savings.

Learn from Suresh's story
Suresh, who works in a private company, will turn 40 in January 2025. His monthly income is around ₹ 1.25 lakh. However, he had not made any plans for retirement till now, while his friends had already started investing. After 20 years, when Suresh will be 60 years old, he will need ₹ 1 lakh per month for regular expenses. In such a situation, he decided to start investing in the National Pension System (NPS).

How to plan for NPS at the age of 40?

• Age to start investing: 40 years
• Investment period: 20 years (till age 60)
• Monthly investment: ₹20,000
• 10% top-up investment every year
• Total Investment: ₹1,37,46,000 (over 20 years)
• Estimated Return: 10% per annum
• Total Corpus: ₹3,22,90,815 (₹3.23 crore)
• Total Profit: ₹1,85,44,815 (₹1.85 crores)
• Total tax savings: ₹41,23,800

What will you get after retirement?

• Lumpsum withdrawal: ₹1,61,45,407 (₹1.62 crore)
• Investment in Annuity: ₹1,61,45,408 (55%)
• Monthly pension: ₹1,07,636 (around ₹1 lakh)

Why is NPS the best option?

• Safe Investment: This scheme is completely safe under PFRDA.
• Better returns over long term: Possibility of 10% annual return over 20 years.
• Tax benefits: Tax savings of over ₹41 lakh.
• Financial Independence after Retirement: Regular monthly income along with a lump sum amount.

If you are 40 years old and are worried about retirement, then NPS can be a great option. By making the right plan in time, you can lay the foundation for your bright future.