NPS Calculator (National Pension Scheme)

Your monthly contributions compound at the expected return until retirement to build a corpus. At 60 you can take up to 60% as a tax-free lump sum, and at least 40% must buy an annuity that pays your pension — pension = annuity corpus × annuity rate ÷ 12. For example, ₹10,000 a month from age 30 to 60 at 10% builds a corpus of about ₹2.28 crore: you'd take roughly ₹1.37 crore tax-free and use ₹91 lakh to buy an annuity, giving about ₹45,587 a month at a 6% annuity rate. This calculator shows all four figures and the pension's value in today's money.

Working backwards: a ₹50,000 monthly pension is ₹6,00,000 a year, so at a 6% annuity rate you need an annuity corpus of ₹1 crore. Since at least 40% of your NPS corpus must be annuitised, that means a total corpus of about ₹2.5 crore. Starting at 30 and retiring at 60 (30 years) at a 10% return, that's roughly ₹11,000 a month — less if you step up contributions yearly or earn a higher return, more if you start later. Set your target in the calculator and adjust the monthly amount until the pension hits ₹50,000.

It depends on your contribution and asset mix. NPS funds have historically returned roughly 9–11% a year over long periods, blending equity, corporate bonds and government securities. As an illustration, ₹10,000 a month for 20 years at 10% grows to about ₹76 lakh; over 30 years the same amount reaches about ₹2.28 crore — the extra decade more than triples it, because compounding accelerates. Equity-heavy NPS choices can return more but swing more year to year. Enter your own numbers above for an estimate.

NPS offers India's most generous retirement tax breaks. Your contribution is deductible up to ₹1.5 lakh under Section 80CCD(1) (within the 80C limit), PLUS an exclusive extra ₹50,000 under Section 80CCD(1B) — a deduction no other product gives. Both apply in the old regime only. Separately, an employer's NPS contribution is deductible under Section 80CCD(2), up to 14% of salary, in both the old and new regimes. At retirement, the 60% lump sum is fully tax-free; only the pension from the annuity is taxable as income. The extra ₹50,000 deduction alone saves a 30%-slab investor about ₹15,600 a year.

They solve different problems. NPS is market-linked, so it can return more (~9–11% historically) and gives the extra ₹50,000 deduction, but it locks your money until 60, forces you to annuitise at least 40%, and the pension is taxable. PPF is fully guaranteed at 7.1%, completely tax-free (EEE), and far more flexible — it matures in 15 years and you can access it. A common approach is to use both: NPS for the higher-return pension and the extra deduction, PPF for safe, liquid, tax-free savings. Compare them with our PPF calculator.

At a minimum, ₹50,000 a year (about ₹4,200 a month) makes sense for almost anyone in the old regime, because it fully uses the exclusive ₹50,000 80CCD(1B) deduction. Beyond that, a common guideline is to direct around 10% of your income to retirement across NPS and other investments. Remember the trade-off: NPS money is locked until 60 and 40% must become a pension, so don't over-allocate at the expense of liquid savings and an emergency fund. Use the calculator to size a contribution that hits your target pension without straining your cash flow.