Rs 1 Crore NPS Corpus: Pension Under Different Annuity Options

The National Pension System, or NPS, is like a piggy bank where working people save money for the time when they grow old and stop working.

When they retire, they have to use at least one-fifth of that savings to buy something called an annuity — a deal with an insurance company that pays them a monthly allowance for life.

The article looks at how big this monthly allowance would be if someone used Rs 1 crore of their savings to buy the annuity.

It turns out the monthly money depends a lot on which annuity plan you choose.

A simple plan that pays only you and stops when you die gives the most money every month — for example, about Rs 71,760 with one company at age 60.

Plans that keep paying your husband or wife after you die, or give the purchase price back to your family, pay less each month.

One family-protection plan would pay only about Rs 58,000 per month for the same Rs 1 crore.

Waiting until age 65 instead of 60 can raise the monthly payment even higher, up to about Rs 78,000.

The news also says rules changed so retirees only have to lock up 20% of their savings in annuities, not 40% as before.

So the big choice is between getting the largest allowance now or making sure your family is taken care of after you are gone.