NPS Calculator — Retirement Corpus & Monthly Pension
Project your NPS corpus, tax-free lumpsum, and monthly pension at 60.
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Three Numbers This Calculator Projects, and Why
Your monthly NPS contribution compounds at whatever expected return you set until age 60, and this calculator surfaces the three figures that determine your actual retirement outcome: total corpus at exit, the portion you can withdraw as a tax-free lumpsum, and the monthly pension the remaining annuity portion will pay. Because NPS is market-linked rather than fixed-rate, the expected-return slider exists specifically so different assumptions can be stress-tested against the same contribution plan.
The 40% Annuity Rule That Shapes Your Payout
At normal exit, age 60, at least 40% of the accumulated corpus must be used to purchase an annuity from a PFRDA-registered insurer, and that mandatory portion is what converts a lumpsum into a recurring monthly pension for life. The remaining share — up to 60% — comes out as a lumpsum that is entirely tax-free. Exiting before 60 raises the mandatory annuity portion to 80%, which is why this calculator treats 60 as the default exit age for its projections.
Equity-Heavy vs Conservative Allocation — Setting a Realistic Return
NPS lets a subscriber choose how contributions split across equity, corporate bonds and government securities, and that choice drives the return assumption that belongs in this calculator. Equity-heavy allocations (Aggressive or Auto Life Cycle 75) target higher long-run returns, while conservative, bond-heavy mixes run meaningfully lower. Ten percent is a common planning midpoint, but the slider exists so the projection can match whichever allocation a subscriber has actually chosen.
What is the National Pension System and what does this calculator show?
The National Pension System (NPS) is a market-linked retirement scheme regulated by PFRDA, open to any Indian citizen aged 18–70. Your monthly contributions are invested across equity, corporate bonds, and government securities by a pension fund manager of your choice, compounding until you exit at 60. This calculator projects three numbers that matter: your total corpus at 60, the tax-free lumpsum you can withdraw, and the monthly pension the annuity portion will pay. Because NPS returns depend on markets and your asset mix, the expected-return slider lets you stress-test — equity-heavy allocations have historically delivered around 9–12% over long periods, while conservative mixes run lower.
The 40% annuity rule and what happens at 60
At normal exit from NPS, at least 40% of your corpus must purchase an annuity from a PFRDA-registered insurer — this is what converts your savings into a lifelong monthly pension. The remaining share, up to 60%, is withdrawn as a fully tax-free lumpsum. The annuity slider above starts at the 40% legal minimum; pushing it higher trades lumpsum for larger pension. Annuity rates currently run roughly 5.5–7% depending on insurer and plan type (with or without return of purchase price), and the pension you receive is taxed as ordinary income at your slab rate. Exiting before 60 is possible but forces 80% of the corpus into the annuity.
NPS tax benefits and how it compares with PPF and EPF
NPS carries a deduction stack no other instrument matches under the old regime: contributions count under Section 80C's ₹1.5 lakh, plus an exclusive extra ₹50,000 under Section 80CCD(1B), plus employer contributions up to 10% of basic salary under 80CCD(2) — the last of which is available under the new regime too. The trade-offs against PPF are lock-in and certainty: PPF guarantees a tax-free 7.1% with money accessible from year 7, while NPS offers higher potential returns but locks funds until 60 and mandates the annuity. Most planners treat them as complements, not competitors — model both here and in our PPF calculator, and check your contribution headroom with the in-hand salary calculator.
Frequently asked questions
How does the NPS calculator work?
Your monthly contributions compound at your chosen expected return until age 60. At exit, at least 40% of the corpus must purchase an annuity that pays monthly pension; the remaining share (up to 60%) is withdrawn as a tax-free lumpsum. The calculator shows all three figures live.
What return should I assume for NPS?
NPS is market-linked, so returns are not guaranteed. Equity-heavy (Aggressive/Auto LC75) allocations have historically delivered around 9–12% over long periods, while conservative government-bond-heavy mixes run lower. 10% is a common planning assumption — adjust the slider to stress-test.
Is the NPS lumpsum at 60 tax-free?
Yes — up to 60% of the corpus withdrawn as lumpsum at 60 is fully tax-free. The annuity purchase itself is also tax-exempt, but the monthly pension you then receive is taxed as income at your slab rate.
What is the minimum annuity requirement in NPS?
At normal exit (age 60), at least 40% of your corpus must buy an annuity from a PFRDA-registered insurer. If you exit before 60, the requirement rises to 80%. The slider above lets you model anywhere from the 40% minimum to a full-corpus annuity.
NPS or PPF — which should I choose?
PPF gives a guaranteed, fully tax-free 7.1% with a 15-year lock-in. NPS offers potentially higher market-linked returns, an extra ₹50,000 deduction under 80CCD(1B), but locks money until 60 and forces an annuity. Many investors hold both — compare with our PPF calculator.
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