Pension Calculator
After you retire, the question is simple: how much can your savings pay you every month, and for how long? This pension calculator treats your retirement corpus as an annuity that keeps earning a modest return while paying you a fixed monthly amount until it runs out over a period you choose. Enter your corpus, the annuity rate you expect, and the number of years you want the income to last, and it works out the level monthly pension the fund can support.
Monthly Pension
₹71,643
Total Payout
₹1,71,94,345
About the Pension Calculator
A pension calculator estimates the fixed monthly income a lump-sum corpus can pay out over a set number of years while the balance continues to earn a return. It is the reverse of a savings calculator: instead of building a corpus, it tells you how steadily you can draw one down.
Why it is useful
Knowing your accumulation corpus is only half the picture; what matters in retirement is the monthly income it buys. This calculator converts a corpus into a realistic pension figure, lets you test different annuity rates and payout periods, and helps you judge whether your savings will comfortably cover your expenses.
How the calculation works
The corpus is treated as an annuity that pays a level amount each month while the remaining balance earns interest. The monthly pension is PMT = PV × i ÷ (1 − (1 + i)^−n), where PV is the corpus, i is the monthly rate (annual annuity rate ÷ 12 ÷ 100), and n is the number of monthly payments over your chosen period.
Key inputs explained
- Retirement corpus: The lump sum you have at retirement to generate income from.
- Annuity rate: The annual return the corpus earns while it pays out, currently around 5–7%.
- Payout period: The number of years, and hence months, you want the pension to last.
Example calculation
Inputs
- Retirement corpus (PV)
- ₹1,00,00,000
- Annuity rate
- 6% p.a.
- Payout period
- 20 years (240 months)
Calculation breakdown
- Monthly rate (i)
- 6 ÷ 12 ÷ 100 = 0.005
- (1 + i)^−n
- (1.005)^−240 ≈ 0.302
- PMT
- 1,00,00,000 × 0.005 ÷ (1 − 0.302)
The ₹1 crore corpus pays about ₹71,650 a month for 20 years, roughly ₹1.72 crore in total, because the balance keeps earning 6% as it is drawn down. Stretching the payout to 25 years or assuming a lower rate would reduce the monthly pension.
Benefits
- Converts an abstract corpus into the monthly income that actually matters.
- Lets you compare annuity rates and payout periods before committing.
- Helps confirm whether your savings can cover your retirement expenses.
Limitations
- Assumes a fixed annuity rate; real returns and annuity quotes vary.
- A finite payout period means the corpus is exhausted at the end, unlike a lifelong annuity.
- Ignores tax on annuity income, which is added to your slab and taxed.
Tips
- Model a payout period longer than your life expectancy to avoid outliving the corpus.
- Compare a guaranteed annuity from an insurer against a self-managed SWP before deciding.
- Factor in inflation — a level pension buys less each year, so build in a cushion.
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About this calculator
The Pension 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.