Retirement Planning: Adopt this formula of ₹442 today, you will have ₹5 crores in hand on retirement..
Every employed person often wonders where will the money come from after retirement i.e. after the age of 60. This is the reason why people do retirement planning. For this, you have to think from now on how much money you need after retirement and where to invest the money. The best option for retirement planning is NPS (National Pension System), in which by investing a little bit, you will get a lot of money on retirement. Let us know if you want Rs 5 crore on retirement (how to get Rs. 5 crore on retirement), then how much money to invest and how.
Formula of Rs 442 for ₹ 5 crore
This formula applies to those youth who have just started their job. So if you are older, then you will not be able to raise Rs 5 crore with this formula. However, you can raise a little less money with this. Let's assume that you want to collect Rs 5 crore on retirement and you have got a job before the age of 25. If you start saving Rs 442 from your salary every day from the age of 25 and invest it in NPS, then you will have Rs 5 crore on retirement.
How will Rs 442 become Rs 5 crore?
If you save Rs 442 every day, you will be able to deposit around Rs 13,260 every month. If you start investing from the age of 25, then you will invest for a total of 35 years till you turn 60. If you have invested this money in NPS, then you will get an average interest of 10 percent there. In this way, by getting compounding interest, your money can become Rs 5.12 crore at the age of 60. That means you will easily have a corpus of Rs 5 crore.
This is 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. 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 earned on that principal. In this way, in 35 years you will deposit a total of Rs 56.70 lakh, but you will get interest of Rs 4.55 crore on it. 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 when NPS matures after 60 years, 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?
The maturity of NPS happens only after you turn 60 years old. In such a situation, you cannot withdraw NPS money before 60 years of age. However, if you have an 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 you can spend your old age comfortably.