Secure a Rs 57,000 Monthly Pension by Starting Early: The Power of Saving Rs 100 per Day for Retirement


Retirement planning is a crucial aspect of financial management, and it is never too early to start saving for one’s golden years. As individuals approach their 40s, they often realize the need to set aside substantial sums of money to build a comfortable retirement fund. However, it is essential to understand that starting to save at a young age can lead to a better pension at a lower cost. The National Pension System (NPS) in India provides a valuable platform for retirement planning, allowing individuals to invest from as early as 18 years of age. By using the NPS calculator, investors can gain an approximate idea of the potential returns, making retirement life more secure and less uncertain.

The Power of Early Investment

One of the key advantages of the NPS is that it allows individuals to invest from a young age. Let’s consider two scenarios to demonstrate the significant impact of early investment:

1. Scenario 1: Saving Rs 50 per day (Rs 1,500 per month) from age 25 to 60, with an expected 10 percent annual return.

In this scenario, the total savings by the age of 60 would amount to Rs. 57,42,416. By converting the entire amount into an annuity, the individual would receive a monthly pension of Rs 28,712. Alternatively, if only 40 percent of the minimum annuity contribution is converted into an annuity, the monthly pension would be Rs 11,845, and the remaining amount of Rs. 34 lakhs could be withdrawn.

2. Scenario 2: Saving Rs 100 per day (Rs 3,000 per month) from age 25 to 60, also with an expected 10 percent annual return.

In this case, the total savings by the age of 60 would amount to a more substantial Rs. 1,14,84,831. By utilizing the entire amount to purchase an annuity, the individual would receive a monthly pension of Rs 57,412. Opting for a 40 percent annuity conversion would result in a monthly pension of Rs 22,970, with the option to withdraw Rs. 68 lakhs.

It is evident from these scenarios that starting to save early can significantly impact the final retirement corpus, leading to a more comfortable and financially secure post-retirement life.

The Role of Market-Linked Returns

It is essential to note that the National Pension System does not guarantee returns. The actual annual returns can be 10 percent or even vary above or below that figure, as they are linked to market performance. This fluctuation in returns can affect the real earnings and overall retirement planning. The performance of the fund manager plays a vital role in determining the returns and success of the investment scheme under NPS.

Looking at historical data, the returns from NPS under the equity segment have been above the average of 13 percent over the last 10 years. Additionally, other schemes have also shown average returns of over 9 percent. However, it is crucial to remember that past performance is not indicative of future results, and investors should carefully assess market risks before making investment decisions.

The Impact of Higher Returns

Higher returns can significantly enhance the pension amount for NPS subscribers. If the individual in the earlier examples earns a 13 percent return until the retirement age while investing Rs. 1,500 per month, they can expect a monthly pension of up to Rs. 63,924. Similarly, investing Rs. 3,000 per month can lead to a substantial monthly pension of Rs. 1,27,848.


In conclusion, the National Pension System offers an excellent opportunity for individuals to plan for their retirement effectively. By starting to save early and making use of the NPS calculator to estimate potential returns, investors can secure a comfortable and financially stable post-retirement life. It is important to understand that the NPS returns are market-linked and may vary over time. While historical data can provide insights, it does not guarantee future performance. Therefore, it is essential to make informed decisions, considering one’s risk tolerance and financial goals, to build a strong retirement corpus through the National Pension System.

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