Want ₹1 lakh monthly pension after retirement? The National Pension System (NPS) is one of the best long-term investment options that helps individuals build a strong retirement fund while ensuring a steady income after retirement. With the power of compounding and strategic investments, an NPS account holder can secure a monthly pension of ₹1 lakh by the time they turn 60 years old.

Let’s understand how this works and how much you need to invest.

Why Choose NPS for Retirement Planning?

✔ Long-term wealth creation – Benefits from compounded returns.
✔ Lump sum withdrawal + Regular pension – Dual benefits.
✔ Tax savings – Eligible for deductions under Section 80C & 80CCD(1B).
✔ Government-backed scheme – Secure and reliable investment.

How Does NPS Work?

📌 Under NPS, your retirement corpus is divided as follows:
✅ 60% of the corpus – Available for lump sum withdrawal.
✅ 40% of the corpus – Invested in an annuity plan, which provides monthly pension.

This means you get a large sum at retirement while also receiving a steady monthly income for life.

How to Get ₹1 Lakh Monthly Pension from NPS?

Example Calculation:

👤 Suppose a person starts investing ₹7,850 per month in NPS at age 20 and continues till age 60 (40 years).

Assumptions:
🔹 Annual return on investment: 10%
🔹 Annuity return rate: 6%

📊 Total Investment Breakdown:
✔ Total amount invested over 40 years = ₹37.68 lakh
✔ Total interest earned (compounded) = ₹4.63 crore
✔ Final corpus at age 60 = ₹5 crore+

Retirement Fund Distribution:

💰 At age 60, the accumulated corpus is divided as follows:

✔ 60% Lump sum withdrawal = ₹3.00 crore (available for personal use).
✔ 40% Investment in annuity plan = ₹2.00 crore (used for pension).

📌 Pension Calculation:
If the annuity earns 6% annual return, then:
✅ Monthly pension = ₹1,00,116

Key Benefits of NPS Investment

🟢 Start Early, Earn More – The earlier you invest, the higher your returns due to compounding.
🟢 Flexibility to Increase Investment – You can increase contributions as your income grows.
🟢 Tax Benefits – Get deductions under Section 80C & 80CCD(1B) of the Income Tax Act.
🟢 Assured Retirement Income – Ensures financial independence post-retirement.

Final Thoughts

💡 If you start investing early in NPS, you can build a retirement corpus of over ₹5 crore and secure a monthly pension of ₹1 lakh. The key is consistent investment and leveraging the power of compounding.

💬 What do you think about NPS as a retirement plan? Share your views in the comments below! 👇