Annual income of Anil (name changed) is Rs 10 lakh and his monthly essential expenditure is Rs 50,000. Anil’s age is 30 years and he works in a private company. To take benefits of tax-saving investments, he invests Rs 1 lakh in PPF each financial year as other eligible expenses cover remaining Rs 50,000 u/s 80C.
Assuming 8 per cent per annum interest rate on PPF in his investment period of 30 years till he retires, the maturity value in his PPF account would be Rs 1,22,34,587. Taking Fixed Deposit (FD) interest rate of 7 per cent per annum after his retirement, by investing the corpus, Anil would get Rs 8,56,421 per annum as interest, which is Rs 71,368 per month to spend after retirement.
