How to Get ₹ 20,000 Pension Per Month?

To generate the monthly pension of Rs. 20,000 after retirement, you need early planning, smart use of retirement schemes, and more. Here are the key points you need to follow:

A fixed pension needs a clear target corpus. Here is a simple estimation:

• Monthly pension needed: ₹20,000
• Annual need: ₹2,40,000
• Average annuity rate (2024): 5–6% per year

So, approx. corpus required: ₹40–48 lakh

Many insurance providers offer lifetime income plans that support stable pension flows in your later years.

Below is a comparison table of common retirement schemes.

The NPS (National Pension System) is a popular financial tool that ensures a decent retirement income. To get pension of 20,000 per month from NPS, you must have a significant amount of corpus at age 60. This corpus will help to generate ₹20000 pension per month. Let’s see how you can do it.

• Consistent deposit: Make a consistent monthly deposit in your Tier 1 account. Even a small monthly deposit can grow well and drive market-linked returns.
• Build a large corpus: You must build a corpus of around ₹40–₹48 lakh to generate a stable ₹20,000 pension per month. However, your final pension amount depends upon returns, contribution levels, and the number of years you invest.
• Use the corpus to buy annuity: NPS rules require you to use 40% or more of your corpus for annuity purchase. This portion funds your lifelong monthly income.
• Choose your annuity: Select an annuity that offers ₹20000 pension per month.
• Tax Note Some NPS tax deductions apply only under the old tax regime. Thus, always review current rules on the Income Tax India or CBDT website.

Tax benefits boost your ₹20000 pension per month goal. Here are the tax benefits available for different pension schemes.

A plan for a 20,000 pension per month offers several benefits. These are:

• Your investment grows and multiplies with a compounding effect.
• A longer investment horizon allows you to absorb market volatility better. You can afford to invest a larger portion in growth-oriented assets (like equity) initially.
• If you start early, you will get a much larger retirement corpus than if you start late. It also ensures you combat rising costs and post-retirement healthcare treatments.

Before choosing the best plan for a 20,000 pension per month, you should consider the following factors:

• Your goals: Before choosing a plan, determine your retirement age, lifestyle, and expenses after retirement, as well as your life expectancy.
• Risk appetite: If you want plans with high potential returns, choose NPS or ULIPs. But these involve high risks too.
  
  If you don’t want these risky plans, then you should go for annuity plans, FDs, or government schemes like POMIS and SCSS. These offer comparatively lower and stable income than plans with high returns.
• Plan features: Always look for features like a guaranteed income component, flexibility in premium payment, and the ability to switch funds.
• Insurer’s track record: For insurance-based products, check the insurer's Claim Settlement Ratio (CSR). Axis Max Life Insurance, for instance, has a CSR of 99.70%.
• Tax Efficiency: Compare the tax benefits offered by different plans under the applicable tax regime.

Buying a plan to acquire 20,000 pension per month is a simple process. For this, you should follow these steps:

• Determine your investment amount and tenure using an online calculator.
• Then compare plans to get pension of 20,000 per month from versatile providers. Check annuity rates, customer service, and reputation before choosing an insurer.
• Also, if you want more personalized guidance, you should speak to a financial advisor or representative from the insurance company.
• After that, start your application. Most of the providers offer a simple online application process. An offline application is also available. For this, you must visit a branch or contact an agent.
• Submit your KYC documents and make the first premium payment.

Your monthly savings depend on your starting age and chosen product. Hence, to build ₹20,000 monthly pension, the amount you must save depends mainly on your age when you start investing.

The table below shows approximate monthly savings required to achieve ₹20,000 monthly pension. However, the values vary by interest rate and investment mix.

A ₹20,000 pension per month supports essential living costs after retirement. You can achieve this goal through smart investment choices. Also, use tools like NPS, debt funds, and annuity plans to reach your target.