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Vivek

Vivek Lala  |251 Answers  |Ask -

Tax, MF Expert - Answered on Mar 12, 2024

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
Vijay Question by Vijay on Feb 01, 2024Hindi
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Is National pension scheme good for retirement income, i am 49yr now and can invest around 1L for another 10 years. Please advise.

Ans: Hello, I would suggest if you want to take exposure in equities, use mutual funds and not NPS purely on the basis of liquidity options
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |4625 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 01, 2024

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Whether NPS (National pension scheme) scheme is good for young employee of the age group of 25 to 35.
Ans: Yes, the National Pension Scheme (NPS) can be a beneficial retirement savings option for young employees in the age group of 25 to 35. Here are a few reasons why:

Long Investment Horizon: Young individuals have a longer investment horizon, allowing them to benefit from the power of compounding. By starting early, they can contribute smaller amounts regularly and accumulate a substantial corpus over time.
Tax Benefits: NPS offers attractive tax benefits under Section 80CCD(1B) of the Income Tax Act, allowing individuals to claim an additional deduction of up to Rs. 50,000 over and above the limit of Rs. 1.5 lakh available under Section 80C.
Choice of Investment Options: NPS provides flexibility in choosing between equity (E), corporate debt (C), and government securities (G) funds based on risk appetite and return expectations. Young investors with a higher risk tolerance may opt for a higher allocation to equity, which has the potential to generate higher returns over the long term.
Low Cost: NPS has one of the lowest fund management charges among pension products in India, making it a cost-effective option for retirement planning.
Portability: NPS is portable across employers and locations, allowing individuals to continue investing in the same account even if they change jobs or relocate.
Pension Annuity: At retirement, a portion of the NPS corpus can be withdrawn as a lump sum, and the remaining amount must be used to purchase a pension annuity, providing a regular income stream during retirement.
However, it's essential to consider factors such as liquidity needs, risk tolerance, and other investment goals before investing in NPS. Young investors should assess their overall financial situation and consult with a Certified Financial Planner to determine if NPS aligns with their retirement planning objectives.

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Moneywize

Moneywize   |123 Answers  |Ask -

Financial Planner - Answered on May 07, 2024

Asked by Anonymous - May 06, 2024Hindi
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Can I invest Rs 40,000 per month in the National Pension Scheme? What kind of returns can I expect from the NPS in 10 years?
Ans: Yes, you can invest Rs 40,000 per month in the National Pension Scheme (NPS). There is no maximum limit on the monthly contributions to NPS.

Important to note about NPS returns:

• NPS returns are market-linked and depend on the chosen investment scheme. The NPS offers various investment options like Equity (E), Corporate Debt (C), Government Bonds (G), Alternative Investment Funds (A). Equity (E) scheme typically has higher returns than other schemes (C, G) but also comes with higher risk.
• It is difficult to predict the exact returns you will get in 10 years as the market is volatile.

Here's an example to give you an idea

Let’s assume you choose an equity scheme with an average annual return of 10%.

• Total investment over 10 years = Rs 40000 per month * 12 months/year * 10 years = Rs 48,00,000
• Estimated returns in 10 years = Rs 48,00,000 * 10% = Rs 4,80,000

This is just an estimate, and actual returns may vary.

Here are some resources that can help you make an informed decision:

• NPS calculator: You can use an NPS calculator to get a more personalised estimate of your retirement corpus and pension amount. These calculators consider factors like your age, investment amount, investment scheme chosen, and expected rate of return.
• NPS investment options: You can find more information about the different NPS investment options on the PFRDA website (https://www.pfrda.org.in/)

Remember, NPS is a long-term investment for retirement planning. Investing early and regularly will help you build a substantial corpus for your retirement.

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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