NPS Calculator – Estimate Your Retirement Corpus & Pension

NPS Calculator – Estimate Your Retirement Corpus & Pension

Planning for a comfortable retirement is one of the most important financial goals. The National Pension Scheme (NPS) is a powerful tool to help you get there, but how much will you actually have? Our Free NPS Calculator helps you visualize your future. Enter your monthly contribution and other details to instantly estimate your total retirement corpus, tax-free lump sum, and expected monthly pension.

NPS Retirement Calculator Tool NPS Calculator Plan Your Retirement Corpus Investment Interest Total Corpus

NPS Retirement Calculator

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Total Investment
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Interest Earned
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Maturity Amount (Corpus)
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Lump Sum Withdrawal (Tax-Free)
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Expected Monthly Pension
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How to Use the NPS Calculator

Estimating your retirement funds is easy. Just adjust the inputs to match your financial situation:

  1. Monthly Investment: Enter the amount you plan to invest in NPS every month.
  2. Your Current Age: Enter your current age to determine the investment period.
  3. Expected Return Rate: Adjust the slider to set the expected annual return on your NPS investments (typically ranges from 8% to 12%).
  4. Annuity Percentage: Choose what percentage of your final corpus you want to use to buy an annuity (minimum 40%). A higher percentage means a larger monthly pension.
  5. Annuity Rate: Set the expected return rate from the annuity plan itself (typically ranges from 5% to 7%).

The results will update automatically as you change the values.

What is the National Pension Scheme (NPS)?

The National Pension Scheme (NPS) is a voluntary, long-term retirement savings scheme initiated by the Government of India. It is designed to encourage systematic savings for retirement. Your contributions are invested in a mix of equity and debt, managed by professional pension fund managers.

How It Works: Accumulation and Payout

  1. Accumulation Phase: You contribute regularly until the age of 60. Your money grows over time through the power of compounding.
  2. Payout Phase (at age 60):
    • You can withdraw up to 60% of the total corpus as a tax-free lump sum.
    • The remaining 40% (minimum) must be used to purchase an annuity plan from an insurance company. This annuity plan then provides you with a regular monthly pension for the rest of your life.

Frequently Asked Questions (FAQ)

Q1: Are the returns on NPS guaranteed?

Answer: No. NPS returns are market-linked and depend on the performance of the underlying assets (equity, corporate debt, government securities). The expected return rate in the calculator is an assumption. Historical returns have often been in the 9-12% range, but this is not guaranteed.

Q2: Why is purchasing an annuity mandatory?

Answer: The primary goal of NPS is to provide a regular pension after retirement, ensuring financial security in old age. The mandatory annuity purchase ensures that at least a portion of the retirement corpus is used for its intended purpose of generating a lifelong income stream, rather than being spent all at once.

Q3: Is the monthly pension I receive from the annuity taxable?

Answer: Yes. The monthly pension received from the annuity plan is treated as income and is added to your total income for the year. It is then taxed according to your applicable income tax slab.

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