In India, the idea of receiving a monthly pension of Rs 1 crore may seem like a pipe dream. But is it entirely impossible? Let’s delve into the world of personal finance to explore the feasibility of achieving this ambitious goal.

A Far-Fetched Dream?

Getting a monthly pension of Rs 1 crore is a far-fetched dream for most individuals. The primary reason is that retirement funds, pension schemes, and government pensions typically don’t offer such substantial amounts.

“Even with a sizable retirement corpus, the interest earned or returns generated might not be enough to sustain a monthly pension of this magnitude. One reason for this is the punishing tax regime. In order for your money to grow you need to be able to invest that much. One would say that with the current taxation regime, the country appears to be more socialist and less democratic,” says Jasmine Damkewala, Senior Partner at Circle of Counsels and Advocate-on-Record, Supreme Court of India.

Exceptions to the Rule

However, there are a few exceptional cases where individuals might receive a monthly pension of Rs 1 crore or more. “High-net-worth individuals with significant investments or business interests can generate enough income to support such a pension. Top corporate executives, renowned sports personalities, and successful entrepreneurs might also receive substantial pensions or benefits that exceed Rs 1 crore per month,” says Damkewala.

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How to Make it Possible

While it is challenging to achieve a monthly pension of Rs 1 crore, it’s not impossible. To get close to this goal, individuals can consider the following strategies:

* Start early and aggressively save for retirement
* Invest wisely in high-yield instruments
* Invest in pension plans and pension funds
* Build multiple income streams
* Aim for exceptional career growth or entrepreneurial success

Financial experts say that in the market, achieving your financial goals is possible with the right investment tenure and consistent contributions for the long term.

“By diversifying your investments into the right options and making regular adjustments based on market conditions, you can aim for a higher corpus. For example, if you start investing at the age of 18 and contribute Rs 3.5 lakh every month until the age of 60 (over 42 years) and earn an average annual return of 12%, you could build a substantial corpus. This could potentially provide you with a monthly pension of over Rs 1 crore during retirement. However, there is no guaranteed returns in the market. So you need to factor in all circumstances before you invest,” says Adhil Shetty, CEO, Bankbazaar.com.

You can invest regularly in a pension scheme or mutual fund schems over the years in a systematic way where the expected or assured accumulated amount at the time of retirement would generate a return of Rs 12 crore per annum.

“You can also make a fixed deposit where the amount of interest minus tax due comes to Rs 12 crore per annum. You can accumulate shares over a long term and then manage and trade in those shares to generate trading returns, capital gains and dividend income of Rs 12 crore after taxes. This way you will be able to get a monthly pension of Rs 1 crore,” suggests Ashish Kapur. CEO, Invest Shoppe.

The significant size of the pension necessitates corresponding investments of a similar scale. Accumulating a considerable retirement fund can be achieved either through a substantial one-time investment or by initiating investments at an early age and sustaining the necessary growth until retirement.

Conclusion

Receiving a monthly pension of Rs 1 crore in India is highly unlikely for most individuals. However, by understanding the exceptions and exploring the right strategies, a select few can make this ambitious goal a reality. While it may not be feasible for everyone, it’s essential to set realistic financial goals and work towards achieving them and also to invest in the correct pension plans and schemes. The bottomline, however, is – Start early and be consistent!