About the NPS Calculator
The National Pension System (NPS) is a voluntary, market-linked retirement scheme regulated by PFRDA. You contribute during your working years, the money is invested in a mix of equity, corporate bonds and government securities, and at retirement part of the corpus buys an annuity that pays a pension. This NPS calculator estimates the corpus, the lump sum you can withdraw and the monthly pension.
It is used by salaried employees, government staff and, increasingly, by self-employed professionals and business owners who have no employer-funded pension. The calculator helps you judge whether your current contribution is likely to produce the retirement income you want, and how the split between lump sum and annuity changes the monthly pension you receive.
The result depends on the monthly contribution, the years left to retirement, the return your chosen funds earn, the share of the corpus used for the annuity and the annuity rate available when you retire. None of these is guaranteed: NPS returns vary with markets, annuity rates change with interest rates, and PFRDA revises the exit rules from time to time. Treat the pension figure as an estimate.
How to use it
- 1Enter your monthly contribution and the annual return you expect.
- 2Enter your current age and the age at which you plan to exit.
- 3Enter the share of the corpus you will use to buy an annuity; 40% is the long-standing minimum.
- 4Enter the annuity rate you expect, then read the corpus, lump sum and monthly pension.
How this is calculated
Corpus = P × [((1 + i)^n − 1) ÷ i] × (1 + i) P = monthly contribution, i = expected annual return ÷ 12 ÷ 100, n = months until retirement, with each contribution made at the start of the month. Annuity corpus = Corpus × annuity share; Lump sum = Corpus − Annuity corpus Monthly pension = Annuity corpus × annuity rate ÷ 100 ÷ 12
Frequently asked questions
How is the NPS pension calculated?
The calculator first projects the corpus at retirement from your monthly contributions and the assumed return. It then sets aside the share you choose for the annuity and multiplies that annuity corpus by the annuity rate to get a yearly pension, divided by twelve for the monthly figure. The rest of the corpus is shown as the lump sum.
How much of the NPS corpus must be used to buy an annuity?
For many years the rule at normal exit was that at least 40% of the corpus had to buy an annuity and up to 60% could be withdrawn as a lump sum. PFRDA has since relaxed the minimum for some subscriber categories and allows small balances to be withdrawn in full. Check the current exit rules for your category.
What return can I expect from NPS?
NPS returns are market-linked and depend on your asset allocation and pension fund manager, so there is no fixed rate. Equity-heavy allocations have higher long-term potential with more volatility, while government securities are steadier. Test a cautious and an optimistic assumption rather than relying on a single figure.
What annuity rate should I assume?
Annuity rates are set by the life insurers empanelled as annuity service providers and depend on your age, the option chosen, such as return of purchase price or a joint-life pension, and prevailing interest rates. They change over time. Look at the rates currently quoted by providers and use a conservative figure.
Are NPS contributions and withdrawals tax-free?
NPS contributions have qualified for tax deductions, including an additional deduction available only for NPS under the old regime, and employer contributions get separate treatment. A portion of the lump sum at exit has been tax-free, while the pension from the annuity is taxed as income. Limits and conditions are notified periodically, so check the current rules.