NPS Calculator

What is an NPS Calculator?

The NPS calculator is an online tool that helps in the estimation of retirement corpus and monthly pension which you can receive under the National Pension Scheme (NPS). NPS is a voluntary retirement scheme and is open for individuals aged 18 to 70 years. The calculator takes into account basic details such as current age, contribution amount, expected annual returns, retirement age and annuity allocation. Ultimately, it projects your retirement savings. 

Benefits of Using NPS Calculator

Some of the key advantages of NPS calculator include:

• Easy To Use: By filling in the required fundamental information, the calculator will provide you with an estimate of the pension corpus you will accumulate and the monthly pension amount for you, making it very easy and convenient to plan your retirement.
• Test Different Options: You can modify the levels of contribution, retirement age or rate of return and observe the effect on final corpus at the time of retirement.
• Informed Financial Planning: It helps in visualising your future savings so that you can design an investment plan according to your financial needs. 
• Quick Calculation: You get instant estimations once you enter your required inputs.

How Does The NPS Calculator Work

The NPS Calculator estimates your retirement corpus using the compound interest formula:

A = P (1 + r/n) ^ nt 

Where:

• A = Maturity amount (retirement corpus)
• P = Total amount invested (principal)
• r = Expected annual rate of return
• n = Number of times interest is compounded in a year
• t = Investment period (in years)

If a 34-year-old invests ₹3,000 per month. Expected returns are 10% till the age of 60, the corpus after retirement will be estimated at around ₹44.35 lakh, whereas the total investment will be ₹9.36 lakh. The actual corpus could vary depending on market performance and the returns generated by NPS funds.

NPS Calculator

Your Age

Years

18 Years 59 Years

Enter Your Age

Monthly Investment

₹

₹500 ₹10L

Enter Investment Per Month

Expected Return on Investment

%

5% 15%

Expected Return on Investment

Percentage of Corpus Allocated for Pension

%

40% 100%

Enter Corpus Percentage

Expected Return from Pension

%

5% 15%

Enter Annuity Return

₹0

Your Monthly Pension

View Plans

₹0

Your Monthly Pension

View Plans Your Pension Calculation

Your Pension Calculation

Total Investment

Returns Earned

Maturity Amount

Maturity Amount split (Lumpsum & Pension)

60%

Lumpsum Amount

At the age of 60 Yrs

40%

Pension Wealth

At the age of 60 Yrs

View Plans

How to Use NPS Calculator

Using NPS calculator is quite simple. One can estimate the final value by following the steps below: 

• Specify Your Monthly Contribution: Specify the amount you wish to invest in your NPS every month.
• Type In Your Current Age: Enter your current age to determine the investment period remaining.
• Make the decision about Your Retirement Age: Enter the age at which you plan to retire from the options available.
• Enter the Expected Rate of Return: After that, the rate of return should be given at which you expect from your NPS investments.
• Select the Annuity Percentage: Decide on the percentage of retirement corpus that you wish to buy an annuity.
• View the Results: The calculator will immediately show you the estimated corpus of your retirement, the sum you would receive as a lump-sum and the monthly pension you can receive during your retirement. 

Who Should Use NPS Calculator

The NPS Calculator can be beneficial for anyone who aims to make an estimate of their retirement corpus and monthly pension received from the National Pension System (NPS). It is especially beneficial for:

• Individuals who are salaried and wish to create a corpus for retirement by making regular deposits into NPS.
• People who are self-employed and do not have an employer-sponsored pension plan want to plan their retirement on their own.
• Newer employees who are interested in learning how early investment can help them build up retirement savings based on the principle of compounding.
• Eligible employees of the government and private sectors who wish to make an investment in the NPS and want to know the benefits they will receive at the time of their retirement.
• Investors looking for retirement planning by comparing different contributions, returns and pension outcomes for them before investing. 

Key Takeaways 

The NPS Calculator gives an estimate of the retirement corpus, lump sum and monthly pension that you will receive on the basis of your contribution amount and rate of return. For example, you can change variables such as amount of contribution, retirement age and expected returns and compare the different scenarios to understand the possible consequences.