It's not a good comparison. Let's take 2.5k monthly investment both in elss mf and nps. Then see the picture. Elss mf will generate 1.92Cr at 15.4% for 30 years. There is no comparison.
Things missing in the video for me: 1. NPS even in scheme E, allows 75% Equity exposure till the age of 50. Post that it comes down by 2.5% each year. So effective return under normal circumstance is 10.5% (12% E and 6% D) which reduces as you grow. So essentially don’t get 12.4% overall…and if a 75% mix of E is able to do it, then be sure that any good MF will beat it as things stand. 2. Amount that annuity schemes would need to provide for a size-able effect on your retirement lifestyle has to be really high and that is just not happening with NPS investment. Even at 10k per month for next 20 years, 40% annuity buy will give you ~17k per month. 17k is not enough even today, one can imagine what will it buy 20 years down the line. 3. Nobody takes out entire MF portfolio in one go. The tax calculation even correct is unrealistic. 4. When you approach retirement, one would want to plan in a way to put funds in Equity, Debt, Cash and Bonds, so as to reduce tax and volatility. Same cannot be done in NPS. Infact, planning investment strategy at 60, will be all the more tougher (considering you will need to invest lump sum in Equities to last you your remaining life time and if not them, other option being less risk options, which may or may not cover the increasing cost of survival. 5. NPS are not impervious to market cycles. They can go through downs just like MFs. In MFs you can actively switch between funds (if need be) or atleast diversify between funds. In NPS, one fund manager and even that you can change only once a year. 6. NPS too make returns from the same market. So effectively apart from tax benefit it offers nothing else. (For me) 7. Additional return on the money saved from reduced tax burden is a bit much. You invested 50k more to save 15k. So effectively aren’t you are further down 35k? 8. If Invested amounts were same, then comparison would have been better. My two cents on the subject: 1. Considering long term, no harm in dabbling in equity MF and stocks (do your own homework) 2. Don’t be a trader. Remain an investor. 3. Small contributions go a long way. Markets are not a get quick rich scheme. 4th and most important one when planning for retirement,PLEASE speak with a SEBI approved investment advisor. Good advice is not always free. Payup and saveup. Peace! PS: I invest in NPS too, but only for the tax benefit available now, with the money I don’t not being available till 60.
Thanks for d information sir, Which is d good investment plan for retirement acc to u? I want to start investing now at my 39...i want to have a best retirement and want to have money for my kids higher education after 12 years from now,,,plz give recommendations
@@Arunkumar-mh1vp since you have to plan for retirement and also for your kids education, I will strongly recommend reaching out to a financial advisor. An RIA can, not only help you plan better but also make a plan for you which takes into account your experience in the markets and risk appetite.
This is not a correct comparison. You are not investing an equal amount in all the instruments you picked for comparing and talking only about tax deduction in capital gain. A fair comparison will be when you invest the same monthly amount for 30 years and then see how much return they are giving post tax deduction.
Major missing points. 1. With ELSS who is stopping you to invest 12k which is what I am asked to put in for NPS in your calculator? That way its going to be massively in favour of ELSS. 2. With NPS, I am bound to take 40% annuity which has low yield of 5% currently, which I believe being a fixed income asset class will be even lower after 30 years. See PF/FD used to give more than 12% 30 years back. 3. NPS equity percentage starts at 80%, but it keeps on decreasing as you age automatically, and the whole portfolio equity portion is reduced and not just new investments. So, effectively, you will not get more than 10% from NPS. Your whole argument is inclined towards giving less income tax, and not generating more wealth. NPS is just an okay/good product.
Overall great video sir. One question sir, Taking 1 crore Corpus case.. In nps we are paying 2500 per month and in elss we are paying 1200 per month.. If we invest 2500 in elss, post tax amount is much higher than nps post tax return.. Can you please put some light one this...
Scheme explanation is good. But SIP amount is different which is misleading your comparison. You should consider same amount of SIP as money outgo to compare net inflow of all such scenarios.
My original retirement plan was to retire at 62, work part-time, and save money. However, high prices for everything have severely affected my plan. I'm concerned if people who went through the 2008 financial crisis had an easier time than I am having now. The stock market is worrying me as my income has decreased, and I fear I won't have enough savings for retirement since I can't contribute as much as before.
It's recommended to save at least 20% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 20% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of investing in the stock market and potentially grow your retirement savings over time.
Considering the increased complexity since the 2008 crash and COVID, I suggest diversifying your financial portfolio. I hired an advisor and successfully grew my portfolio by over $150K during this turbulent market using defensive strategies that protect and profit from market fluctuations.
I've been in touch with a financial advisor ever since I started my business. Knowing today's culture The challenge is knowing when to purchase or sell when investing in trending stocks, which is pretty simple. On my portfolio, which has grown over $900k in a little over a year, my adviser chooses entry and exit orders.
She appears to be a true authority in her profession with over two decades of experience. I looked her up on the internet and skimmed through her site, very professional. already sent her an inquiry hoping for a response soon.
The comparison doesnt seem apple to apple. Monthly Outflow in NPS is double of MF SIP, if we double to the MF SIp the returns would be significantly greater than NPS despite considering the 10% LTCG. Please throw light on this.
Hi Rahul, you have considered 12.40% return for NPS . However this is for E category only which can form max 75% of the total invested corpus. We also need to consider remaining 25% which will be inversted in Gov/Corporate bonds, etc (which have
Analysis needs to be relooked here. It is wise to see how much returns you make with the SAME AMOUNT OF SIP. If SIP of Rs 2500 is invested in any of the mutual funds, the returns are far higher than NPS (even after paying tax)
Your calculations are spot on but one sided. What If I decide to monthly invest same amount 2590 irrespective of the investment plan I choose for my retirement? In this case NPS will generate 1cr but ELSS, LC, MC and SC will generate 1.8-2cr corpus. Even after I pay tax, I get 1.6-1.8cr in hand(the whole corpus+profit). I will earn more + I don't have to buy annuity as well. I can control my money the way I want
I think best part of NPS is not amount of returns ,but strict nature that you cant withdraw major part of the amount till it mature. Needs come by through out your walks of life ,eg:like your child higher education , child marriage and so on. During those times ,you feel like / or at pressure at giving all you have saved till then to achieve those goals so that outcome is better. But in reality ,the more money u spend may not be the key deciding factor of the final outcome of those long term goals. And you end up with not much of a corpus in your hands. And keeping a corpus for future generations actually increase your value ,wen you are old and generating no more income or quality. Stepping up monthly investment yearly is also necessary beat actual value at time of retirement. So create mutual fund portfolio for your long term goals and create a NPS portfolio with yearly step up ,which cant be withdrawn for your safety. What you think?
NPS have so many charges account opening maintenance charges but elss don't have such kind of charges I will go with elss and in elss for long term if any emergency come I can withdraw easily from fund and in elss I can invest more as flexibility like lumpum also
1) For 50k tax benefit NPS is good. 2) For old tax regim for 80C we should go for ELSS and do tax harvesting as their is no long term capital gain for profit upto 1,00,000 per financial year. 3) For new tax regim you can invest in Mutual funds and diversify in equity like index, large and midcap, midcap, smallcap or flexicap and do tax harvesting every year for profit upto 1,00,000. This way you will end up accumulate more money for your retirement. Happy Investing.
8:37 One question. Is this 80CCD applicable for new tax regime? I believe old regime will be eliminated and everyone will be pushed to new regime in future
I think the calculations are misleading: 1. You took 12.4% NPS equity return for calculation but as only 75% of NPS is invested in it, you could have it as combination of 12.4% and around 8% from other government/corporate bonds which comes to ~ 11.3%. 2. Just to avoid all the confusion, you could have reduced 30% tax from NPS monthly contribution and consider it as MF's SIP (Post tax - assuming 30% tax) and compare returns of NPS and MF. I calculated it and I see that NPS total corpus will be lower than post LTCG tax return of mutual fund/ELSS if they manage to beat NPS returns by 1.5% to 2% for 20 and 30 years respectively which I think is quite possible as your sheet indicates Large cap return is 14.4% i.e. 3.1% above NPS return.
But if invest same 2500 in ELSS and Large cap or mid cap or small cap even after deduction of tax we will get more money than NPS right and one more point we will get only 60% at the age of 60 but 40% is there in NPS only for pension they will generate more returns from the remaining amount if I have the same amount large cap or index funds I will get 12 to 15% right. we can think from this perspective also right. Please consider my view also if I am wrong please correct it😊😊😊.
In NPS, if you invest through your organisation. You save because it gets deducted from your taxable income. This is an advantage for 30%tax bracket. Secondly, Tier 2 can be considered for parking emergency funds as it allows you to withdraw any time you want.
Please download a copy here: docs.google.com/spreadsheets/d/1TQdbnPjfKECniChR60A8ieYiEmniwavX9Jl3nav0yXU/edit?usp=sharing Please ask your friends to subscribe to my channel: th-cam.com/users/torahulj Cheers Rahul
Hi Rahul.. with mutual funds you only invest less than half of the money when compared to NPS to get the required goal amount.. so with this if we invest again the additional amount say 1350 in case of 1cr retirement goal, we will get additional 1cr capital gains with mutual funds. Can you provide your thoughts on this?
Yeah I too Tought of This , NPS have 60% Lockin, Same amount Invested in Mutual Funds We will get Double Returns and in Future LTCG is 20% means also there will be Huge amount,,,, I thinking to Invest for retirement in Midcap 1/2 and Smallcap 1/2 Index Funds..Wat's your view on this ? @ Sai bunny
@@vigneshtks yes, for 15+ years period mid and small mutuals funds far better than the NPS interms of returns and liquidity. Maybe the video is promotional, that's why Rahul ji is not responding on this
@@vigneshtks yeah it's backed by govt and regulated by PFRDA. But most of the pension fund managers are from the private sector excluding SBI (PSU). I may be wrong on my previous statement, but why is he not replying on concern which we have.
One question: If let's say we have an active choice (75 equity, 15,10), and invest 100 rupees into Tier 1. After 1 year, assuming 40% growth in equity, and 10 % in the other two asset classes, the total value of trh fund would b 75x 1.4 + 25 x 1.1 = 132.5. Will this total sum be readusted to be 75, 15, 10 again, or will they grow parallely?
I don’t think the NPS Returns assumed is correct. 0.75x12.40% + 0.1xGovBond + 0.1xCorpBonds+ 0.05xAIF = ? Should be the right calculation. It would be maximum 10% I believe.
Also let’s not forget that we are not getting the entire 1Cr in NPS case, just 60% and 40% gets locked in for a super low rate of interest annuity. I was also a fan of NPS but these things are making me loose interest in NPS Now. If it is NPS vs PPF then it will be NPS for me but NPS Vs ELSS will always be ELSS for me.
@@naushir_miraz If it is NPS VS PPF then it is PPF because you can withdraw the entire corpus in PPF. Also NPS has a lock in period of 60 years, you cannot stop your investment & withdraw your money if the markets are in bad condition. However, if NPS was given a sovereign guarantee like PPF then it would be better.
This comparison is complete non-sense... doesn't make any sense... if you want to compare the tax treatment and want to show that out 80 lacs or 1 crore how much one would have to pay tax and after paying the tax how much one will get the corpus then you should compare with same investment amount and then see how much one will accumulate after paying the tax... no doubt NPS is a good retirement vehicle and I have also invested there but comparing with mutual fund schemes is complete non-sense... both are different... even if you invest for 30 years you wouldn't get more than 9% from NPS because of the structure, forget about 12%...
Is there any way to circumvent this 40% annuity part ? I feel it's of no use if it doesn't allow us to plan our annuity while at the time of nps account creation (as in what annuity plan i m expecting and i wld be unable to exercise deferred annuity % which r higher when purchased separately) For Eq, if i create nps account and take LIC jeevan utsav plan with bi-yearly payouts till my death as an option, i m able to enjoy higher annuity % as compared to annuity purchased immediately after retirement.
In Nps for same money we are paying double. Ione gold point is In NPS we can save money using credit card also. Which makes it more systematic. In elss or something the money will be available to withdraw which is not good actually. Money should be locked atleast for 10 years.
Thanks for the great initiative and advice. I am 62yrs old individual overseas citizen of India, can I invest a lump sum amount in NPS scheme and withdraw quarterly ? In that case how the interest is calculated and the rate of interest? Also if I could get the access to the calculator please.
It is clearly looks like manipulating the data and showing public that how good is NPS but not comparing properly!! You should keep monthly SIP same for all the schemes or Total amount after tax same. Then you can give clear cut idea. Please give it a thought and make another video
Hi Rahul, cool explanation. I have one question here on retirement let's say my annual PF exceeds 80C bracket, and I have also asked my employer to contribute 10% of my basic salary to NPS account apart from these two investment do you see anything else i need to consider for my retirement corpus of 10 Crore as my current age is 35.
Rahul nps returns are taken at higher side.. not all nps subscriber go for scheme E fully..more over current market is good that's why getting good nps returns. I think long term practical nps returns will be 9-10%..only biggest advantage of nps is tax saving. That's it is must have instrument for retirement.. returns are just deceiving..
What if some one died before 30 Years and stopped to pay the fund will that give to there family without Tax and interest .Will the family need to update NPS customer support for withdrawal
Hi Rahul, I have joined your paid membership to this channel. Please share access to your calculator. Kindly let me know how do I access and work on your calculator, as I have a 20 year time duration to calculate my scenarios.
Hello - Pls see the link below. docs.google.com/spreadsheets/d/1TQdbnPjfKECniChR60A8ieYiEmniwavX9Jl3nav0yXU/edit?usp=sharing Pls download a copy and make changes into your local copy as per your needs.
Its an excellent,detailed explanation giving comparison between different instruments of investment. I think NPS is not suggested by majority of investment advisors due to its lowest expense structure. Going further why not make a video on why, how to devise and follow 'Live Below Your Means' strategy during earning period? Its need of the hour.
Great video Rahul. Of course I am investing in NPS. Are there any more good options for generation of retirement corpus.. Please post video on the same, Thanks..
I have a question here. The point what is missing in the video is that the 40% amount which will be given as annuity after retirment will generate only around 5-6 return. Which can be a big loss after retirement as just investing that money in index mutual funds can give almost doube the returns. So if you consider from 1 cr corpus of retirement 40 lac will generate ard 6 percent returns in retirement where as mutual funds can generate 12 percent.
Hi Vikesh - I see your point but after the age of 60, investing in Index funds is NOT advised as one needs stable, regular income even if it's less. Equity proportion after 60 goes down to minimum possible for normal investors.
@torahulj Yes it is not advised to invest in index. But isn't it better to SWP in index funds or what is your suggestion for the same. As after retirement also we can divide our money like some money we might need after 10 years for that we can invest in index but we lose all this flexibility if we invest in NPS
You cant compare absolute benefit without considering time value of money and say NPS is best. May be comparison should be with same investment in NPS and mutual fund how much corpus we will have at end of 60 years
Please download a copy here: docs.google.com/spreadsheets/d/1TQdbnPjfKECniChR60A8ieYiEmniwavX9Jl3nav0yXU/edit?usp=sharing Please ask your friends to subscribe to my channel: th-cam.com/users/torahulj Cheers Rahul
hey rahul, i have a question here, when you are explaining about second picture, you are saying you can save 5000 on 50000 amt if someone is on 10% taxslab by using 8CCD(1B) but 5000 is the ADDITIONAL AMOUNT that I have to take out from my pocket after putting whole 50000 in my NPS account. so I don't think that will help for the comparison with MF. Or please let me know if I am understanding it wrong Could you please also create the comparison of fees levied on NPS vs MF?
The total invested amount in NPS is the highest, nearly double of MFs and ELSS. Comparison should be done keeping the same amount that we invest. Sorry, but this sounds like manipulation.
If you find this video useful, please like the video and share with your friends to support my small channel, thank you so much :-)
Calculator. Please
hello can you plz explan same by keeping the monthly SIP same ? then the real pic comes out
Someone pretending to be Rahul Jain has replied to my comment above asking me to message him. Please take appropriate action against him.
Need calculator
It's not a good comparison. Let's take 2.5k monthly investment both in elss mf and nps. Then see the picture. Elss mf will generate 1.92Cr at 15.4% for 30 years. There is no comparison.
Things missing in the video for me:
1. NPS even in scheme E, allows 75% Equity exposure till the age of 50. Post that it comes down by 2.5% each year. So effective return under normal circumstance is 10.5% (12% E and 6% D) which reduces as you grow. So essentially don’t get 12.4% overall…and if a 75% mix of E is able to do it, then be sure that any good MF will beat it as things stand.
2. Amount that annuity schemes would need to provide for a size-able effect on your retirement lifestyle has to be really high and that is just not happening with NPS investment. Even at 10k per month for next 20 years, 40% annuity buy will give you ~17k per month. 17k is not enough even today, one can imagine what will it buy 20 years down the line.
3. Nobody takes out entire MF portfolio in one go. The tax calculation even correct is unrealistic.
4. When you approach retirement, one would want to plan in a way to put funds in Equity, Debt, Cash and Bonds, so as to reduce tax and volatility. Same cannot be done in NPS. Infact, planning investment strategy at 60, will be all the more tougher (considering you will need to invest lump sum in Equities to last you your remaining life time and if not them, other option being less risk options, which may or may not cover the increasing cost of survival.
5. NPS are not impervious to market cycles. They can go through downs just like MFs. In MFs you can actively switch between funds (if need be) or atleast diversify between funds. In NPS, one fund manager and even that you can change only once a year.
6. NPS too make returns from the same market. So effectively apart from tax benefit it offers nothing else. (For me)
7. Additional return on the money saved from reduced tax burden is a bit much. You invested 50k more to save 15k. So effectively aren’t you are further down 35k?
8. If Invested amounts were same, then comparison would have been better.
My two cents on the subject:
1. Considering long term, no harm in dabbling in equity MF and stocks (do your own homework)
2. Don’t be a trader. Remain an investor.
3. Small contributions go a long way. Markets are not a get quick rich scheme.
4th and most important one when planning for retirement,PLEASE speak with a SEBI approved investment advisor. Good advice is not always free. Payup and saveup.
Peace!
PS: I invest in NPS too, but only for the tax benefit available now, with the money I don’t not being available till 60.
Thanks for d information sir,
Which is d good investment plan for retirement acc to u? I want to start investing now at my 39...i want to have a best retirement and want to have money for my kids higher education after 12 years from now,,,plz give recommendations
@@Arunkumar-mh1vp since you have to plan for retirement and also for your kids education, I will strongly recommend reaching out to a financial advisor. An RIA can, not only help you plan better but also make a plan for you which takes into account your experience in the markets and risk appetite.
nice one
Good 👍
😮
WHY ARE WE NOT DISCUSSING ABOUT EQUAL amount invested
This is not a correct comparison. You are not investing an equal amount in all the instruments you picked for comparing and talking only about tax deduction in capital gain. A fair comparison will be when you invest the same monthly amount for 30 years and then see how much return they are giving post tax deduction.
Totally manipulated data to show nps better and showing his thoughts are write
Exactly the same what I thought about. Why is he not putting 2.5k in all cells 🙄🤦🏻♂️
Bcoz the target is one crore only after retirement.
If u invest 2500 instead of 1272 sip then elss is best.
Absolutely well said.
Major missing points.
1. With ELSS who is stopping you to invest 12k which is what I am asked to put in for NPS in your calculator? That way its going to be massively in favour of ELSS.
2. With NPS, I am bound to take 40% annuity which has low yield of 5% currently, which I believe being a fixed income asset class will be even lower after 30 years. See PF/FD used to give more than 12% 30 years back.
3. NPS equity percentage starts at 80%, but it keeps on decreasing as you age automatically, and the whole portfolio equity portion is reduced and not just new investments. So, effectively, you will not get more than 10% from NPS.
Your whole argument is inclined towards giving less income tax, and not generating more wealth.
NPS is just an okay/good product.
So,should we go for it just to save tax or ELSS is better?
I think elss is a good option
I think comparision should be like...
For 1 cr NPS SIP is about 2500 & with same amount of SIP ELSS gives about 1.5 cr...instead of 1 cr
hi Rahul, major difference is with montly SIP ammount. for NPS is 2X than ELSS.
Overall great video sir.
One question sir,
Taking 1 crore Corpus case..
In nps we are paying 2500 per month and in elss we are paying 1200 per month..
If we invest 2500 in elss, post tax amount is much higher than nps post tax return..
Can you please put some light one this...
Rahul i watched your another video on elss and kind of made my mind as per tour analysis...but this half baked nps analysis of yours made me rethink.
Nice clear presentation.
Well explained Rahul.Great to listen your videos
Great video sir !!!!
Moral:
Invest 20% in NPS and 80% in midcap and small cap Mutual funds for 30 years.
Scheme explanation is good. But SIP amount is different which is misleading your comparison. You should consider same amount of SIP as money outgo to compare net inflow of all such scenarios.
Agreed
My original retirement plan was to retire at 62, work part-time, and save money. However, high prices for everything have severely affected my plan. I'm concerned if people who went through the 2008 financial crisis had an easier time than I am having now. The stock market is worrying me as my income has decreased, and I fear I won't have enough savings for retirement since I can't contribute as much as before.
It's recommended to save at least 20% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 20% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of investing in the stock market and potentially grow your retirement savings over time.
Considering the increased complexity since the 2008 crash and COVID, I suggest diversifying your financial portfolio. I hired an advisor and successfully grew my portfolio by over $150K during this turbulent market using defensive strategies that protect and profit from market fluctuations.
I've been in touch with a financial advisor ever since I started my business. Knowing today's culture The challenge is knowing when to purchase or sell when investing in trending stocks, which is pretty simple. On my portfolio, which has grown over $900k in a little over a year, my adviser chooses entry and exit orders.
@@maryHenokNftMind if I ask you recommend this particular professional you use their service? i have quite a lot of marketing problems
She appears to be a true authority in her profession with over two decades of experience. I looked her up on the internet and skimmed through her site, very professional. already sent her an inquiry hoping for a response soon.
Thanks Rahul for detailed comparison of NPS with MFs👏
The comparison doesnt seem apple to apple. Monthly Outflow in NPS is double of MF SIP, if we double to the MF SIp the returns would be significantly greater than NPS despite considering the 10% LTCG. Please throw light on this.
Hi Rahul, you have considered 12.40% return for NPS . However this is for E category only which can form max 75% of the total invested corpus. We also need to consider remaining 25% which will be inversted in Gov/Corporate bonds, etc (which have
Sirji please have a look on your monthly sip?
Is your monthly sip same for each scheme?
Analysis needs to be relooked here. It is wise to see how much returns you make with the SAME AMOUNT OF SIP. If SIP of Rs 2500 is invested in any of the mutual funds, the returns are far higher than NPS (even after paying tax)
Yes, pls explain one more keeping the same investment amount
Target Amount CAGR Number of years Monthly SIP Yearly Total Invested Amount Capital Gain (before tax) Tax (12.5%) Capital Gain (after tax)
NPS ₹10,000,000 12.40% 30 ₹2,590 ₹31,084 ₹932,513 ₹9,067,487 ₹0 ₹9,067,487
ELSS ₹ 19,659,832 15.49% 30 ₹2,500 ₹30,000 ₹900,000 ₹18,759,832 ₹2,344,979 ₹16,414,853
Large Cap MF ₹ 15,238,999 14.40% 30 ₹2,500 ₹30,000 ₹900,000 ₹14,338,999 ₹1,792,375 ₹12,546,624
Mid Cap ₹ 22,176,190 16.00% 30 ₹2,500 ₹30,000 ₹900,000 ₹21,276,190 ₹2,659,524 ₹18,616,666
Small Cap ₹ 14,549,265 14.20% 30 ₹2,500 ₹30,000 ₹900,000 ₹13,649,265 ₹1,706,158 ₹11,943,107
Nippon Nifty BEES ETF ₹ 20,804,300 15.73% 30 ₹2,500 ₹30,000 ₹900,000 ₹19,904,300 ₹2,488,038 ₹17,416,263
UTI Nifty50 Index Fund ₹ 9,207,437 12.19% 30 ₹2,500 ₹30,000 ₹900,000 ₹8,307,437 ₹1,038,430 ₹7,269,008
Your calculations are spot on but one sided. What If I decide to monthly invest same amount 2590 irrespective of the investment plan I choose for my retirement? In this case NPS will generate 1cr but ELSS, LC, MC and SC will generate 1.8-2cr corpus. Even after I pay tax, I get 1.6-1.8cr in hand(the whole corpus+profit). I will earn more + I don't have to buy annuity as well. I can control my money the way I want
Quite an unique video which nobody discussed.
Appreciate ur efforts
❤
Your analysis is an eye opener
Thank you Mantha :-)
It isn't. You are just stupid if you can't understand the stupidity he said in this video
I think best part of NPS is not amount of returns ,but strict nature that you cant withdraw major part of the amount till it mature.
Needs come by through out your walks of life ,eg:like your child higher education , child marriage and so on.
During those times ,you feel like / or at pressure at giving all you have saved till then to achieve those goals so that outcome is better.
But in reality ,the more money u spend may not be the key deciding factor of the final outcome of those long term goals.
And you end up with not much of a corpus in your hands.
And keeping a corpus for future generations actually increase your value ,wen you are old and generating no more income or quality.
Stepping up monthly investment yearly is also necessary beat actual value at time of retirement.
So create mutual fund portfolio for your long term goals and create a NPS portfolio with yearly step up ,which cant be withdrawn for your safety.
What you think?
NPS have so many charges account opening maintenance charges but elss don't have such kind of charges I will go with elss and in elss for long term if any emergency come I can withdraw easily from fund and in elss I can invest more as flexibility like lumpum also
1) For 50k tax benefit NPS is good.
2) For old tax regim for 80C we should go for ELSS and do tax harvesting as their is no long term capital gain for profit upto 1,00,000 per financial year.
3) For new tax regim you can invest in Mutual funds and diversify in equity like index, large and midcap, midcap, smallcap or flexicap and do tax harvesting every year for profit upto 1,00,000.
This way you will end up accumulate more money for your retirement. Happy Investing.
You should also compare the monthly payout.. and then compare..then the mutual fund will be winner
8:37 One question. Is this 80CCD applicable for new tax regime? I believe old regime will be eliminated and everyone will be pushed to new regime in future
Thanks Rahul very useful ❤….
Can I plan for a average retirement plan at the age of 50 now with low capacity of savings ? Plz help.🙏
Sir it's very informative and helpful.
Sir, do one more video by putting d same amount in monthly investment column...would be helpful to many people, thank u
Target Amount CAGR Number of years Monthly SIP Yearly Total Invested Amount Capital Gain (before tax) Tax (12.5%) Capital Gain (after tax)
NPS ₹10,000,000 12.40% 30 ₹2,590 ₹31,084 ₹932,513 ₹9,067,487 ₹0 ₹9,067,487
ELSS ₹ 19,659,832 15.49% 30 ₹2,500 ₹30,000 ₹900,000 ₹18,759,832 ₹2,344,979 ₹16,414,853
Large Cap MF ₹ 15,238,999 14.40% 30 ₹2,500 ₹30,000 ₹900,000 ₹14,338,999 ₹1,792,375 ₹12,546,624
Mid Cap ₹ 22,176,190 16.00% 30 ₹2,500 ₹30,000 ₹900,000 ₹21,276,190 ₹2,659,524 ₹18,616,666
Small Cap ₹ 14,549,265 14.20% 30 ₹2,500 ₹30,000 ₹900,000 ₹13,649,265 ₹1,706,158 ₹11,943,107
Nippon Nifty BEES ETF ₹ 20,804,300 15.73% 30 ₹2,500 ₹30,000 ₹900,000 ₹19,904,300 ₹2,488,038 ₹17,416,263
UTI Nifty50 Index Fund ₹ 9,207,437 12.19% 30 ₹2,500 ₹30,000 ₹900,000 ₹8,307,437 ₹1,038,430 ₹7,269,008
I think the calculations are misleading:
1. You took 12.4% NPS equity return for calculation but as only 75% of NPS is invested in it, you could have it as combination of 12.4% and around 8% from other government/corporate bonds which comes to ~ 11.3%.
2. Just to avoid all the confusion, you could have reduced 30% tax from NPS monthly contribution and consider it as MF's SIP (Post tax - assuming 30% tax) and compare returns of NPS and MF. I calculated it and I see that NPS total corpus will be lower than post LTCG tax return of mutual fund/ELSS if they manage to beat NPS returns by 1.5% to 2% for 20 and 30 years respectively which I think is quite possible as your sheet indicates Large cap return is 14.4% i.e. 3.1% above NPS return.
Flexibility is not considered in entire discussion. In ELSS also,, beyond the lock in, one can easily get the funds out. Not with NPS!
But if invest same 2500 in ELSS and Large cap or mid cap or small cap even after deduction of tax we will get more money than NPS right and one more point we will get only 60% at the age of 60 but 40% is there in NPS only for pension they will generate more returns from the remaining amount if I have the same amount large cap or index funds I will get 12 to 15% right. we can think from this perspective also right. Please consider my view also if I am wrong please correct it😊😊😊.
Please do a video on how to generate regular monthly income after retirement.
Excellent educative video.
In NPS, if you invest through your organisation. You save because it gets deducted from your taxable income. This is an advantage for 30%tax bracket.
Secondly, Tier 2 can be considered for parking emergency funds as it allows you to withdraw any time you want.
Sir I need the calculator to calculate for my 20 years corpus
Please download a copy here:
docs.google.com/spreadsheets/d/1TQdbnPjfKECniChR60A8ieYiEmniwavX9Jl3nav0yXU/edit?usp=sharing
Please ask your friends to subscribe to my channel: th-cam.com/users/torahulj
Cheers
Rahul
Hi Rahul.. with mutual funds you only invest less than half of the money when compared to NPS to get the required goal amount.. so with this if we invest again the additional amount say 1350 in case of 1cr retirement goal, we will get additional 1cr capital gains with mutual funds. Can you provide your thoughts on this?
I too endorse the same view as sai & request you to throw my light rahul ji
Yeah I too Tought of This , NPS have 60% Lockin, Same amount Invested in Mutual Funds We will get Double Returns and in Future LTCG is 20% means also there will be Huge amount,,,, I thinking to Invest for retirement in Midcap 1/2 and Smallcap 1/2 Index Funds..Wat's your view on this ? @ Sai bunny
@@vigneshtks yes, for 15+ years period mid and small mutuals funds far better than the NPS interms of returns and liquidity.
Maybe the video is promotional, that's why Rahul ji is not responding on this
@Sai bunny I think cannot be promotional because backed by the Central govt
@@vigneshtks yeah it's backed by govt and regulated by PFRDA. But most of the pension fund managers are from the private sector excluding SBI (PSU). I may be wrong on my previous statement, but why is he not replying on concern which we have.
One question: If let's say we have an active choice (75 equity, 15,10), and invest 100 rupees into Tier 1. After 1 year, assuming 40% growth in equity, and 10 % in the other two asset classes, the total value of trh fund would b 75x 1.4 + 25 x 1.1 = 132.5. Will this total sum be readusted to be 75, 15, 10 again, or will they grow parallely?
I don’t think the NPS Returns assumed is correct. 0.75x12.40% + 0.1xGovBond + 0.1xCorpBonds+ 0.05xAIF = ? Should be the right calculation. It would be maximum 10% I believe.
Also let’s not forget that we are not getting the entire 1Cr in NPS case, just 60% and 40% gets locked in for a super low rate of interest annuity.
I was also a fan of NPS but these things are making me loose interest in NPS Now.
If it is NPS vs PPF then it will be NPS for me but NPS Vs ELSS will always be ELSS for me.
Also Personal Finance is very Personal. I think this way. This suits me. Others may think the other way around. So let’s agree to disagree.
Naushir - thanks for the comment. 12,40% is total return not only for equities. You can check again on NPS website. 🙏🙏
@@naushir_miraz If it is NPS VS PPF then it is PPF because you can withdraw the entire corpus in PPF. Also NPS has a lock in period of 60 years, you cannot stop your investment & withdraw your money if the markets are in bad condition. However, if NPS was given a sovereign guarantee like PPF then it would be better.
@@torahuljCan you please suggest some lump sum investments
Sir last 10 yr se me NPS me investment kar Raha hu lekin avarage return 7.85 % Mila hai....
But in ELSS we can to invest half money to get the desired amount .
Sir you did one mistake --
For nps monthly spi was 2500
But for elss it was around half.
(
Then how can you compare them??
Unequal Contribution......2500 i. NPS , 1200 in ELS.....Very Stupid way to compare😂😂😂😂
Fantastic comparison
Hi Rahul, Incorrect comparison. With NPS your SIP is 12K and Large cap SIP is 6K. If i match my largecap sip your total calculation becomes invalid
How he can compare nps and mf, while 2500 pm investment in NPS and only 1270 in mf, 😅😅😅 do the equal investment for comparison
ELSS is more better and simple for the time of widrawal. Also it gives 2 x return as compare NPS.
i am THIAGARAJAN, Please share me that calculator table......thanks
Sare funds me same SIP hone chahiye tabhi to decide kar paenge ki kya behtar hai...MERE KHAYAL SE MIDCAP WALA MUTUAL FUND JADA BEHTAR HAI NPS SE...
This comparison is complete non-sense... doesn't make any sense... if you want to compare the tax treatment and want to show that out 80 lacs or 1 crore how much one would have to pay tax and after paying the tax how much one will get the corpus then you should compare with same investment amount and then see how much one will accumulate after paying the tax... no doubt NPS is a good retirement vehicle and I have also invested there but comparing with mutual fund schemes is complete non-sense... both are different... even if you invest for 30 years you wouldn't get more than 9% from NPS because of the structure, forget about 12%...
Is there any way to circumvent this 40% annuity part ? I feel it's of no use if it doesn't allow us to plan our annuity while at the time of nps account creation (as in what annuity plan i m expecting and i wld be unable to exercise deferred annuity % which r higher when purchased separately)
For Eq, if i create nps account and take LIC jeevan utsav plan with bi-yearly payouts till my death as an option, i m able to enjoy higher annuity % as compared to annuity purchased immediately after retirement.
Awesome man
In Nps for same money we are paying double.
Ione gold point is In NPS we can save money using credit card also.
Which makes it more systematic.
In elss or something the money will be available to withdraw which is not good actually. Money should be locked atleast for 10 years.
Thanks for the great initiative and advice. I am 62yrs old individual overseas citizen of India, can I invest a lump sum amount in NPS scheme and withdraw quarterly ? In that case how the interest is calculated and the rate of interest? Also if I could get the access to the calculator please.
It is clearly looks like manipulating the data and showing public that how good is NPS but not comparing properly!! You should keep monthly SIP same for all the schemes or Total amount after tax same. Then you can give clear cut idea. Please give it a thought and make another video
ELSS Me to kam invest karna padta hai monthly lagbhag same return amount mil jata hai??
Nice video....how about nps vs retirement funds ? Which is better ? A combination of both will work ? Plz advise
Good calculation bro
Thanks Amit :-)
I m 51 yrs now. can I know how much should I invest/ mnth to get 1 cr? Can I invest lumpsum
If period of investing is only 15 years then what will be monthly investment for NPS scheme E as suggested you
Hi Rahul, cool explanation. I have one question here on retirement let's say my annual PF exceeds 80C bracket, and I have also asked my employer to contribute 10% of my basic salary to NPS account apart from these two investment do you see anything else i need to consider for my retirement corpus of 10 Crore as my current age is 35.
Hi Rahul, i am really impressed with this video can you pls share this calculator
nice explation,please try to avoid hiding text above the screen
Please share the calculator.. thanks for the content.
Rahul nps returns are taken at higher side.. not all nps subscriber go for scheme E fully..more over current market is good that's why getting good nps returns. I think long term practical nps returns will be 9-10%..only biggest advantage of nps is tax saving. That's it is must have instrument for retirement.. returns are just deceiving..
Fantastic inputs. Please share the calculator
What if some one died before 30 Years and stopped to pay the fund will that give to there family without Tax and interest .Will the family need to update NPS customer support for withdrawal
The investment amount should be the same then it would make more sense to me.
If i invest lump sum in NPS for 15 yrs can i expect 12% return?? Thanks
Should I invest lumpsum amount like 10 to 15 lack at a time in NPS tier 1 account?
My nps giving 5 percentage to 7 percentage for last five years as psu bank staff i cant chnage nps fund from CG to Equity as its coperate choice
did u count INXEDATION in calculating capital gain tax
Hi Rahul, I have joined your paid membership to this channel. Please share access to your calculator. Kindly let me know how do I access and work on your calculator, as I have a 20 year time duration to calculate my scenarios.
Hello - Pls see the link below.
docs.google.com/spreadsheets/d/1TQdbnPjfKECniChR60A8ieYiEmniwavX9Jl3nav0yXU/edit?usp=sharing
Pls download a copy and make changes into your local copy as per your needs.
Why r u making fool ...compare with same sip amout
Sir DO COMPARISON
FAIRLY
AND GIVE ACCESS OF YOUR EXCEL SHEET
Ur Calculator looks cools to justify nps is better .. but u sud have included ppf into it.. do share ur ideas. Tks
Sure I will
Good educating video
Pl share me the excel file. Unable to download
Its an excellent,detailed explanation giving comparison between different instruments of investment. I think NPS is not suggested by majority of investment advisors due to its lowest expense structure. Going further why not make a video on why, how to devise and follow 'Live Below Your Means' strategy during earning period? Its need of the hour.
In mutual funds you are investing half money than nps. I don't think its fair comparison. NPS still bad for all tax categories.
Agree, investment is not same
Yes invested amount is not considered i think,that should also be considered
Great video Rahul. Of course I am investing in NPS. Are there any more good options for generation of retirement corpus.. Please post video on the same, Thanks..
I have a question here. The point what is missing in the video is that the 40% amount which will be given as annuity after retirment will generate only around 5-6 return. Which can be a big loss after retirement as just investing that money in index mutual funds can give almost doube the returns. So if you consider from 1 cr corpus of retirement 40 lac will generate ard 6 percent returns in retirement where as mutual funds can generate 12 percent.
Hi Vikesh - I see your point but after the age of 60, investing in Index funds is NOT advised as one needs stable, regular income even if it's less. Equity proportion after 60 goes down to minimum possible for normal investors.
@torahulj Yes it is not advised to invest in index. But isn't it better to SWP in index funds or what is your suggestion for the same. As after retirement also we can divide our money like some money we might need after 10 years for that we can invest in index but we lose all this flexibility if we invest in NPS
Your video is misleading. You should consider the same SIP amount in all Scheme.
How much sure that you will live beyond sixty years? Our age and life are uncertain!mutual fund can withdraw early.
Hello Rahul. It will be good if you share the calculator
But monthly investing amounts less than to NPS right?
If I invest 2599 in mid cap it will be more than NPS.
If I'm wrong pls correct me.
U r correct he is just playing with the minds of common people..such an ediot
What is that glitch in the video at 11:04 🤔
Very informative video. Please share the calculator.
Pension kinta melaga monthly nps main wo sir nahi bola..
the max you can invest is 50000 annually isnt it, or is there no upper limit
For NPS which fund manager is best could you pls share
You cant compare absolute benefit without considering time value of money and say NPS is best. May be comparison should be with same investment in NPS and mutual fund how much corpus we will have at end of 60 years
You should highlight that the initial investment per month is reduce. Keep the same and compare
Whether this calculation excel sheet we can get?
Please download a copy here:
docs.google.com/spreadsheets/d/1TQdbnPjfKECniChR60A8ieYiEmniwavX9Jl3nav0yXU/edit?usp=sharing
Please ask your friends to subscribe to my channel: th-cam.com/users/torahulj
Cheers
Rahul
Sir the amount we are paying every month you didn't highlight.
If one withdraws 20% at the age of say 53, will be or she get pension from age of 53 or it will start after 60. Thanks
After 60. Because at that time you'll be asked to invest your 40% in annuity scheme
Super video, would appreciate if you could share the calculator , God bless
hey rahul, i have a question here,
when you are explaining about second picture,
you are saying you can save 5000 on 50000 amt if someone is on 10% taxslab by using 8CCD(1B) but 5000 is the ADDITIONAL AMOUNT that I have to take out from my pocket after putting whole 50000 in my NPS account. so I don't think that will help for the comparison with MF. Or please let me know if I am understanding it wrong
Could you please also create the comparison of fees levied on NPS vs MF?
yeah , but if u didnt invest in nps , then the 5000. will be anyway paid as tax , and the 50,000 you would have spent or invested somewhere else/
The total invested amount in NPS is the highest, nearly double of MFs and ELSS. Comparison should be done keeping the same amount that we invest. Sorry, but this sounds like manipulation.