Enter age as 35 years and monthly contribution as 4000/- in below link to get approximate benefits @60 age. 40% lumpsum amount is non taxable and 40% is must to invest in pension annuity fund and remaining 20% you have option to invest either in Annuity or withdraw (wealth tax applicable for withdrawals). Monthly Pension paid is taxable based on tax slabs.
http://www.npstrust.org.in/content/pension-calculator
Step 1: Invest 10,00,000/- in Bank as FD to get returns of 5000/- per month on the name of non-earning family member to avoid TDS.
Step 2: Use this 5000/- amount to invest 4000/- in NPS and 1000/- in APY respectively per month till account holder age becomes 60 years. In NPS opt for 60% Annuity Value(30Laksh) and 40% Lump Sum value(20Lakhs) to be withdrawn (tax free) at the age of 60 Years.
Step 3: Pension Returns at the age of 60 Years in terms of pension amount
5000/- pension per month @60Years for investment of 1000/- per month towards APY
15000/- Pension per month @60Years as annuity from NPS with monthly contribution of 4000/-
10000/- Pension per month @60Years by reinvesting 40% of lumpsum in NPS (i.e. 20,00,000) in LiC
5000/- return of monthly interest for 10 Lakhs invested in Step 1 above.
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35,000/- in total Pension per month
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On expiry of member his Life Partner will get same amount as pension.
On expiry of life partner, the nominee / last survivor can fetch
8,70,000/- for APY
30,00,000/- for Annuity fund Principal of NPS
20,00,000/- LiC Vayo Vandana yojana principal reimbursement to nominee
10,00,000/- Bank F.D. invested by member in Step 1.
------------
68,70,000/- Total payment to children/family members / nominee
-------------
regular monthly contributions to NPS Tier 1 is not mandatory, only 1000/- per year is compulsory if you want to contribute the way mentioned above, it is out of your own interest and availability of funds in that month. There is no upper limit on contributions, however only 50000/- is exclusively considered for IT exemption under 80CCD.You may wonder why i mentioned 4000/- per month, why not 40000/- per month, the reason is 4000x12 = 48000/- ~= 50000/- IT Exemption allowed. Though you invest 48000/- to your retirement pension, you can get tax benefit for 30% of 48000/- = 16000/- per year. It means you invest only 32000/- per year to create wealth of 50Lakhs(approx) when you retire.
References:
faqs on NPS Tier 1 Contributions:
https://www.npscra.nsdl.co.in/all-faq-contribution.php
https://enps.nsdl.com/eNPS/NationalPensionSystem.html
Always remember that there are only two scenario's that can hit our Happier Life:
1. If you are under lived before your 60 years of age, take a Term policy worth of 5 to 10 times of your annual income to take care of your family members.
2. if you are over lived above your 60 years of age, take retirement pension plan like NPS Tier 1, NPS Lite/APY, PPF, SSY etc to take care of yourself without expecting to depend on your family members.
http://www.npstrust.org.in/content/pension-calculator
Step 1: Invest 10,00,000/- in Bank as FD to get returns of 5000/- per month on the name of non-earning family member to avoid TDS.
Step 2: Use this 5000/- amount to invest 4000/- in NPS and 1000/- in APY respectively per month till account holder age becomes 60 years. In NPS opt for 60% Annuity Value(30Laksh) and 40% Lump Sum value(20Lakhs) to be withdrawn (tax free) at the age of 60 Years.
Step 3: Pension Returns at the age of 60 Years in terms of pension amount
5000/- pension per month @60Years for investment of 1000/- per month towards APY
15000/- Pension per month @60Years as annuity from NPS with monthly contribution of 4000/-
10000/- Pension per month @60Years by reinvesting 40% of lumpsum in NPS (i.e. 20,00,000) in LiC
5000/- return of monthly interest for 10 Lakhs invested in Step 1 above.
----------
35,000/- in total Pension per month
----------
On expiry of member his Life Partner will get same amount as pension.
On expiry of life partner, the nominee / last survivor can fetch
8,70,000/- for APY
30,00,000/- for Annuity fund Principal of NPS
20,00,000/- LiC Vayo Vandana yojana principal reimbursement to nominee
10,00,000/- Bank F.D. invested by member in Step 1.
------------
68,70,000/- Total payment to children/family members / nominee
-------------
regular monthly contributions to NPS Tier 1 is not mandatory, only 1000/- per year is compulsory if you want to contribute the way mentioned above, it is out of your own interest and availability of funds in that month. There is no upper limit on contributions, however only 50000/- is exclusively considered for IT exemption under 80CCD.You may wonder why i mentioned 4000/- per month, why not 40000/- per month, the reason is 4000x12 = 48000/- ~= 50000/- IT Exemption allowed. Though you invest 48000/- to your retirement pension, you can get tax benefit for 30% of 48000/- = 16000/- per year. It means you invest only 32000/- per year to create wealth of 50Lakhs(approx) when you retire.
References:
faqs on NPS Tier 1 Contributions:
https://www.npscra.nsdl.co.in/all-faq-contribution.php
https://enps.nsdl.com/eNPS/NationalPensionSystem.html
Always remember that there are only two scenario's that can hit our Happier Life:
1. If you are under lived before your 60 years of age, take a Term policy worth of 5 to 10 times of your annual income to take care of your family members.
2. if you are over lived above your 60 years of age, take retirement pension plan like NPS Tier 1, NPS Lite/APY, PPF, SSY etc to take care of yourself without expecting to depend on your family members.
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