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Age-Wise NPS Plan Targets Rs 50,000 Pension
NDTV··24 Aug
Financial planners say the monthly investment needed for a Rs 50,000 pension after retirement through the National Pension System depends heavily on the investor's starting age. Assuming a 10 percent annual return, a 30-year-old may need to invest about Rs 10,000 to 12,000 monthly, rising to Rs 20,000 to 25,000 for someone starting at 40.
Prism
What It Means For You
- If you are planning retirement, the required monthly SIP for a target pension depends heavily on your starting age.
- Younger investors benefit far more from compounding, needing a smaller monthly contribution to reach the same pension goal.
- Anyone using NPS should know new rules let non-government subscribers withdraw up to 80 percent of their corpus.
What's Happening
- Financial planners estimate the monthly NPS investment needed for a Rs 50,000 pension varies sharply by starting age.
- A 30-year-old may need to invest about Rs 10,000 to 12,000 monthly at a 10 percent assumed return.
- Someone starting at 40 may need roughly Rs 20,000 to 25,000 monthly to reach the same target.
What Changed in NPS Exit Rules
- The mandatory annuity share for non-government subscribers was reduced from 40 percent to 20 percent under recent rules.
- Subscribers can now stay invested until age 75, extended from the earlier limit of 70.
- Annuity income is not inflation-indexed, so planners suggest building a larger corpus beyond the pension target alone.
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