National Pension Scheme Annuity Calculator

National Pension Scheme is a scheme introduced and regulated by the Government of India. It is mainly for the benefit of retired persons. Investments in the scheme can be made much before one's retirement approaches. The investor is allowed to make withdrawals of upto 60% of the maturity value as a lump sum. The remaining amount is compulsory to be used towards the annuities. The scheme is widely available for all citizens of India and is one of the most economical packages one can purchase for retirement.

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The National Pension Scheme annuity calculator may be used to calculate the pension amounts that an investor can expect at the time of his retirement. It can be used to make accurate calculations regarding one's finances at the time of retirement.

What is a Pension?

A pension may be considered as monthly investments that are made available to an individual after his retirement. The investor is expected to invest in the NPS to be able to avail of this offer. The annuities depend on the following factors:

  • Initial the sum invested in the scheme
  • Rate of interest applied
  • Time period for which the investment is made

The NPS serves as a financial investment that guarantees a secure retirement to many working-class individuals. However, it is to be considered that the figures revealed by the national pension scheme annuity calculator are only tentative, and the actual values might differ slightly.

Eligibility to Invest in NPS

Any citizen of India between the ages of 18 to 60 may invest in NPS. Individuals must also be considered eligible based on the Know-Your-Customer guidelines issued by all the organizations that dispense the scheme. 

Types of National Pension Schemes

There are basically two types of pension schemes available for investment. They are as follows:

  1. Individual NPS Account

    There is only a single contributor in this type of account. The person who purchases the annuity is the one who makes all the decisions relating to the account, and he or any beneficiary whom he chooses will enjoy the benefits of the investments.

  2. Corporate NPS Account

    This type of account is created when a corporate organization provides retirement investment benefits. In such a case, the organization and the individual can both make contributions to the same accounts. This will result in a greater value being invested. Hence the corpus at maturity will be greater too.

The National Pension Scheme Annuity Calculator may be used to make calculations for both these types of accounts. 

Need for National Pension Scheme Annuity Calculator

The National Pension Scheme Annuity Calculator guarantees the investor a level of financial independence during his retirement if he invests in the NPS. 

It provides the investor with the tentative amount of maturity value he may expect at the time of maturity of the scheme. This will help the investor plan certain life events accordingly, such as buying a house after retirement or planning a holiday.

Although the results of the National Pension Scheme Annuity Calculator are tentative, they are very accurate. The difference between the amount quoted by the calculator and the actual sum received is only very slight, so the investor must plan accordingly.

How to use NPS Annuity Calculator?

The National Pension Scheme Annuity Calculator can be easily accessed by any individual wishing to invest in the NPS. By following the steps listed below, one can easily use the calculator to determine a pension amount for the future:

Step 1: Locate the National Pension Scheme Annuity Calculator online on the National Pension System Trust website.

Step 2: Enter personal details, e.g., investment amount, birthdate, the time period the investor wishes to remain invested for, etc.

Step 3: The first slider provided on the website may then be used to determine the rate of return on investment that the customer expects.

Step 4: The next slider helps the investor determine the percentage of the annuity that he is willing to purchase.

Step 5: The last slider helps the investor determine the rate of interest that he expects on the annuity.

Step 6: Once all the information has been fed in; the calculator will display results for the following:

  • Lump-sum that an investor can expect at maturity
  • Pension that an investor can expect at maturity
  • The total sum an individual would have tentatively contributed during the tenure of the scheme.

Illustration of Investment in NPS

For the purpose of gaining a better understanding of how the National Pension Scheme operates, we will now see a short example displaying the use of NPS by an investor.

Assume that a 24-year-old female working professional decides to contribute Rs. 2000 from her salary every month towards the NPS. The return on investment expected is 9%. The percentage of an annuity she expects to purchase is 50%, and the rate of return on the annuity is 7%

Once all this information is entered into the National Pension Annuity Calculator, the following results will be obtained, based on calculations made by it:

Total Sum Invested = Rs. 8, 64,000

Corpus Accumulated = Rs. 65, 08,958

Lump Sum Available = Rs. 32, 54,479

Monthly Annuity Available = Rs. 18,984

These figures are tentative, and the actual values may vary slightly.

Information Required for the Calculator

  • An individual must be more than 18 years of age and less than 60 years of age to apply for the NPS.
  • Larger investments in the NPS will automatically generate a larger corpus and greater monthly annuity amounts.
  • In order to obtain the maximum benefits on Income Tax, an investor should contribute Rs. 50,000 towards the NPS.
  • The return on investment is subject to change based on tax laws, as regulated by the Government of India.
  • The amount displayed on the National Pension Annuity Calculator is only tentative, and actual values may vary slightly.

Benefits of NPS Annuity Calculator

Here is a rundown of core benefits of National Pension Annuity Calculator:

  • The National Pension Annuity Calculator is easily accessible online and is simple to use.
  • It can be accessed from the comfort of the investor's home, at any time, as per his convenience.
  • It provides results within seconds and can be used multiple times for the investor to be sure of the investment.
  • It is completely free of charge for the investor to use.
  • It gives the investor a certain level of financial independence and helps him plan his retirement better.

FAQ's

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