NPS Calculator
The National Pension System (NPS) is a market-linked, government-regulated retirement scheme run under the PFRDA that lets you build a corpus through small monthly contributions during your working years. This NPS calculator projects that corpus at 60 and estimates the monthly pension it can fund. Enter your monthly contribution, the years to retirement, and an expected return, and it shows your accumulated corpus, the tax-free lumpsum you can take, and the annuity-funded pension you could draw for life.
Minimum 40% must be used to buy an annuity.
Corpus at Retirement
₹1,13,96,627
Lumpsum Withdrawal
₹68,37,976
Annuity Corpus
₹45,58,651
Monthly Pension
₹22,793
About the NPS Calculator
An NPS calculator estimates the retirement corpus your regular contributions can grow into and the pension the mandatory annuity portion could pay. It applies compound growth to every monthly contribution and then splits the maturity value into the lumpsum you withdraw and the annuity that funds your pension.
Why it is useful
NPS is one of the few products that combines a low-cost, equity-linked build-up with an extra tax deduction, so knowing the likely corpus helps you decide how much to contribute. The calculator makes the long horizon tangible, showing how a modest monthly amount compounds over decades and what pension it eventually supports.
How the calculation works
The corpus is projected with the SIP future-value formula FV = P × [((1 + i)^n − 1) ÷ i] × (1 + i), where P is the monthly contribution, i is the monthly return (annual return ÷ 12 ÷ 100), and n is the number of months. At 60, up to 60% of that corpus is a tax-free lumpsum and at least 40% must buy an annuity; the pension is annuity corpus × annuity rate ÷ 12.
Key inputs explained
- Monthly contribution: The amount you invest in your NPS Tier-I account every month.
- Expected return: The assumed annual return on your NPS funds; blended equity-debt portfolios have historically returned around 9–11%.
- Years to retirement: The period from now until you turn 60 and the corpus matures.
- Annuity rate: The yearly rate the insurer pays on the annuity portion, currently around 6%.
- Annuity portion: The share of the corpus used to buy the annuity — at least 40%.
Example calculation
Inputs
- Monthly contribution
- ₹5,000
- Expected return
- 10% p.a.
- Period
- 30 years (360 months)
- Annuity rate
- 6% p.a.
Calculation breakdown
- Monthly rate (i)
- 10 ÷ 12 ÷ 100 = 0.008333
- Corpus FV
- 5,000 × ((1.008333)^360 − 1) ÷ 0.008333 × 1.008333
- Annuity portion (40%)
- ₹1.14 cr × 40% ≈ ₹45.6 lakh
You invest ₹18 lakh over 30 years and reach about ₹1.14 crore. Taking 60% (≈ ₹68.4 lakh) as a tax-free lumpsum and annuitising 40% (≈ ₹45.6 lakh) at 6% funds a pension of roughly ₹22,800 a month for life.
Benefits
- Builds a large retirement corpus from small, automated monthly contributions.
- Offers an extra ₹50,000 deduction under 80CCD(1B), over and above the 80C limit.
- Lets you take 60% tax-free at 60 while a lifelong pension covers the rest.
Limitations
- Returns are market-linked and not guaranteed; the projection assumes a steady rate.
- At least 40% of the corpus must buy an annuity, and annuity income is taxable.
- Early exit before 60 is restricted and forces a larger share into an annuity.
Tips
- Use the extra 80CCD(1B) deduction fully before adding more to other 80C options.
- Choose the auto or active equity allocation that matches your age and risk appetite.
- Start in your 20s or 30s — the final decade of compounding builds most of the corpus.
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About this calculator
The NPS Calculator is built and maintained by the PaisaBot team. All calculations run instantly in your browser using established financial formulas, and we use high-precision arithmetic to keep the results reliable.
Data accuracy: Interest rates, tax slabs, and scheme rules are updated periodically, but figures can change with RBI, government, and lender revisions. Always confirm the latest rates with your bank or an official source before acting.
Educational purpose: This tool is provided for general information and financial education only. It does not constitute investment, tax, or legal advice. For decisions specific to your situation, please consult a qualified financial advisor.