Pension plans play a crucial role in securing a stable and comfortable retirement for individuals in all fields. They not only act as a reliable source of income during the retirement age but also offer great peace of mind to the person who has worked his/ her whole life earning for himself/ herself, and the family.
Due to the lucrative fixed deposit interest rates, many people prefer investing in fixed deposits to get decent returns for retirement age. But there are other ways to get a 20K monthly pension in 2023. This post aims to help you shortlist some of the best ways and options to invest to get a decent pension post-retirement.
Best Ways to Get 20K Monthly Pension
Here are some of the best ways to get a 20K monthly pension in 2023 for a well-funded retirement period:
1. Start Saving Early:
The earlier you start saving for your retirement, the more scope you will get for your investments to grow over some time. In short, saving early will help you fetch the benefit of saving a large amount of money for your life after retirement.
2. Increase Your Contributions:
The second-best way to get a 20K monthly pension is by maximizing your contributions to your retirement account. Do so especially, if your employer is also contributing the same so that you can enjoy saving for your retirement.
3. Spread Your Investments:
A good way to get maximum savings for your retirement is by spreading your investments. This way, you can also minimize the risk by investing money in different investments like bonds, real estate, and stocks. Simultaneously, it will increase the scope of growth in varied plans.
4. Go for Employer-Sponsored Plans:
You are also advised to invest in employer-sponsored plans to enjoy maximum allowable contributions. Look for pension plans that offer a specific amount of income in specific years on a retirement basis for the total years of service.
5. Choose Pension Annuity Plans:
The best pension plan in India comes in the form of a pension annuity plan. It offers a fixed monthly pension post-retirement. Those looking for a guaranteed return investment plancan go ahead with this plan to enjoy a steady income after retirement.
6. Use Tax Benefits:
Remember that the Government of India offers tax benefits towards investments made for retirement. So, try investing in such schemes in 2023 to maximize your savings and reduce your tax.
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Best Investment Plans to Get 20K Monthly Pension in 2023
Listed below are some best investment plans that can help you fetch a 20K monthly pension in 2023:
1. NPS or National Pension Scheme:
National Pension Scheme or NPS is a government-based pension scheme launched in January 2004 for the benefit of government employees. However, later in 2009, everyone was allowed to enjoy investing in it for old age. Employees who invest in an NPS scheme are eligible to get tax benefits on all their contributions. Anyone aged between 18 to 70 years can opt for an NPS and use the national pension scheme calculatorto calculate the returns as pension on their investment.
2. Fixed Deposits:
Offered by all Indian banks and various financial organizations, fixed deposits or FDs are one of the most preferred ways of investing for retirement. The best thing about these plans is that the fixed deposit ratesremain unchanged during the entire span of the FD unaffected by the changes in the financial markets in the country.
3. Unit Linked Insurance Plans:
ULIP or a Unit Linked Insurance Plan comes as a perfect plan for those looking for an investment plan with decent insurance. It provides financial security to the family of the insured in case of an unfortunate death and offers an easy switching of funds based on your personal preference.
How to Use NPS Pension Calculator?
Follow these steps to use the national pension scheme calculator:
Step 1: Visit the official NPS calculator link
Step 2: Enter the current age
Step 3: Enter the expected retirement age
Step 4: Enter your current salary
Step 5: Enter the expected inflation rate
Step 6: Enter your expected return on the investment
Step 7: You will now see an estimated amount of retirement savings through this NPS calculator
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If you are seriously thinking about how to save money for your retirement, then you must act now by searching for a guaranteed return planthat helps you save for the future. It is always a good idea to work for an employer who offers a stupendous pension plan allowing you to take full advantage of government benefits. If you choose to open an FD, then make sure to compare fixed deposit interest ratesof different banks and then invest in one that offers the maximum interest rates.
FAQs: How to Get 20k Monthly Pension in India?
What is the NPS interest rate?
The interest rates for a National Pension Scheme or NPS may vary between 9 to 12%. This interest rate depends on the performance of the assets, and therefore, you can not predict the amount you will receive after retirement.
How much monthly pension can I get from NPS?
Some of the factors that will decide how much monthly pension you will get from an NPS like:
~ Investment duration
~ Amount of Contribution
What will happen to my retirement savings, if I die before reaching retirement age?
Do not worry, none of your investments will go wasted even if you die before reaching retirement age. Your entire investment amount and savings will be transferred to your nominee or designated heir.
What are the benefits of using a pension calculator?
The following are the main advantages of using a pension calculator:
~ Helps understand various investment options
~ Help estimate accurate projects on the amount to be received after retirement
~ Saves time that otherwise goes wasted in manual calculations
~ Provides an easy way to monitor the progress and make the changes if required in your savings
How much monthly pension comes from EPF?
Currently, the monthly pension for an EPS (Employee Pension Scheme) amount is 8.33% of the actual salary. The different amount is then transferred from the EPF (Employee Provident Fund) to the EPS account.