How Much Monthly Pension Does NPS Give? | ET Money

Video Description

The National Pension System or NPS is amongst the lowest-cost retirement investment options that are currently available in our country In this video we shall be focussing on the post-accumulation stage of NPS i.e. the pension part, as we examine • The factors impacting your monthly pension amount • What’s an annuity • The types of annuities offered • The annuity providers • Pension calculations ► FACTORS IMPACTING MONTHLY NPS PENSION AMOUNT The National Pension System is different because the amount accumulated by a subscriber depends on two key variables i.e. the contribution made and the returns achieved which are its key differentiators as compared to traditional pension plans ► WHAT IS AN ANNUITY? An annuity is a financial product which is typically offered by a life insurance company. The way it works is that one would purchase an annuity by paying a lumpsum amount of say 50 lakhs or 1 crores a bit like a fixed deposit and the insurance company would provide the purchaser of that annuity and/or his or her family members a fixed monthly income for a specified period of time ► TYPES OF ANNUITY OFFERED UNDER NPS While annuity providers continue to innovate on the products front .. our research has put forth 4 different types of annuities that are currently being offered under the National Pension System 1. Life Annuity without Return of Purchase Price Under this plan, subscribers or annuity buyers will receive a monthly pension during their lifetime and upon the death of the subscriber, these monthly payouts will stop 2. Life Annuity with Return of Purchase Price There are two parts to this annuity plan the “life annuity” part and the “return of purchase price” part which can also be abbreviated as ROP going forward Now, the life annuity part works exactly like the basic version i.e. the NPS subscriber shall receive a monthly fixed pension until his or her death thereby ensuring a steady income in the post-retirement years The second part i.e. the “with return of purchase price” part means that upon the death of the annuity buyer .. the price at which the annuity was purchased, shall be paid back to the nominees as a lump sum 3. Joint Life Annuity a) Without ROP b) With ROP In the first scenario i.e. without ROP, the annuity buyer or subscriber receives monthly pension payments during his or her lifetime and upon the demise of the subscriber, the spouse continues to receive the pension benefit during his or her lifetime Once the spouse also expires, the contract terminates and the monthly pension payout is stopped However in the second scenario i.e. joint life annuity with ROP upon the death of the annuity buyer or the spouse whichever happens later the annuity’s purchase price is additionally paid out to the designated nominee 4. Family Income In this case, after the death of the annuity buyer the spouse will continue to receive pension for his or her lifetime and after the spouse’s demise, the dependent mother, followed by the dependent father of the annuity buyer will receive the monthly pension If all the eligible annuitants were to expire .. then the monthly payouts would be stopped Now this plan too comes in a “without ROP” and “with ROP” options so you might want to see the pros and cons of each Life insurance companies are continuously coming up with more and more options like inflation-adjusted monthly pension, return of balance purchase price, partial pension to second annuitant etc. .. ► Resources 📚 https://www.northwesternmutual.com/life-and-money/whats-the-difference-between-a-pension-and-an-annuity/ 🔢 https://www.etmoney.com/tools-and-calculators/nps-calculator 🎥 Complete Guide on NPS https://www.youtube.com/watch?v=H0452CXiUXc 🎥 ET Money Answers: Your Questions on NPS https://www.youtube.com/watch?v=w0ih8scnEz4 🎥 Best NPS Managers https://www.youtube.com/watch?v=B2Im6jO8tGk 🎥 National Pension Scheme Tax Benefits https://www.youtube.com/watch?v=ilLIPbRIUbk ► Chapters 00:00 Introduction 01:04 Factors Impacting Monthly Pension Amount 02:31 What is an Annuity? 04:31 Types of Annuity 08:12 Monthly Pension Payout Calculation #ETMoney #NPS 👉 To invest in Direct Plans of top Mutual Funds for free, download the ETMONEY app: https://etmoney.onelink.me/unJQ/5ca1ae3b ► Subscribe to ET Money Hindi https://www.youtube.com/channel/UCzWtyDo9KmEC1JoAqa1LIEw 👉 Read for more information: https://www.etmoney.com/learn/nps/how-much-monthly-pension-can-i-get-from-nps/ 👉 Follow us on: ► Facebook: https://www.facebook.com/ETMONEY/ ► Twitter: https://twitter.com/etmoney ► Instagram: https://www.instagram.com/etmoney_official/ ► LinkedIn: https://www.linkedin.com/company/et_money/