2024-09-04 20:50:31
There are many ways to get a good pension for employees working in the private sector. According to our partner Economic Times, if you are starting a job in the private sector that gives you a basic salary of Rs 14,000 and an annual salary hike of 10%, you can get a monthly pension of Rs 2.9 lakh by making regular contributions to the Employees Provident Fund (EPF) and National Pension System (NPS). This amount is much more than your last basic salary (Rs 2.44 lakh) after 30 years of service.
How to get the benefit of equity returns?
Government employees who invest 10% of their salary through NPS get the benefit of a contribution of 14% from the central government and the respective state governments. But they cannot get high returns from it due to various restrictions. For example, the maximum investment in equities is limited to 15%. At the same time, private sector employees who have opted for a 10% contribution by the company as part of the salary structure can invest up to 75% in equities. Equities are known to give high returns in the long run. In such a situation, private sector employees can raise a very large corpus. Private sector employees can choose 14% of their basic salary for NPS. They can also get income tax exemption for this. In such a situation, they can get help in creating an even bigger corpus for retirement.
How will big coppers be created?
If private sector employees continue to make disciplined contributions to EPF, EPS and NPS upto the limit during their service period, then it is not very difficult to get a good amount at the time of retirement. For example, 24% of the basic salary goes towards EPS, company’s EPF contribution and employee’s EPF contribution. Under the old tax, employers can contribute 10% of the basic salary to NPS. Under the new tax, the deduction limit has been increased to 14% of the basic salary, which will help employees to build a large NPS corpus. If you continue to make these contributions without any interruption during your service period, then it is not very difficult to get 50% of the last basic salary as a regular pension like UPS.
How can I get Rs 1.12 crore?
If you are 30 years old and you invest Rs 5,000 every month in an NPS account. You continue this investment for 30 years. If you get a return of 10% on the investment, then at the age of 60, a total of Rs 1.12 crore will be deposited in your NPS account. As soon as you turn 60, you will get a lump sum of Rs 45 lakh in cash. Apart from this, you will get a pension of Rs 45,000 every month.
Ease for pension, new application form released
A new simplified pension application form has been released for retired central government employees. A total of nine different forms have been converted into a single form – ‘Form 6A’, which was released by Union Minister Jitendra Singh on Friday. Jitendra Singh said that the release of the simplified form is another step of the government towards ensuring ease for pensioners. The new form will be available on Bhavishya and e-HRMS portals, which will be for all retired central government personnel who are going to retire after December 2024.