NPS Calculator (National Pension System)

Plan your retirement by estimating your total pension corpus and monthly pension.

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Understanding the National Pension System (NPS)

The National Pension System (NPS) is a voluntary, long-term retirement savings scheme designed to enable a systematic saving habit for a secure future. It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). NPS encourages you to invest in a pension account at regular intervals during your working life, and it offers a flexible investment approach.

How NPS Works:
  • Accumulation Phase: You contribute to your NPS account regularly until retirement. Your money is invested in a mix of assets like equity, corporate bonds, and government securities, based on your choice.
  • Vesting Phase (at Retirement): Upon retirement, you can withdraw a portion of your accumulated corpus as a tax-free lump sum (currently up to 60%).
  • Annuity Phase: The remaining portion of the corpus (at least 40%) must be used to purchase an annuity plan from a PFRDA-registered insurance company. This annuity provides you with a regular monthly pension for the rest of your life.

Frequently Asked Questions (FAQ)

Any Indian citizen between the ages of 18 and 70 can open an NPS account. This includes salaried individuals, self-employed professionals, and even NRIs.

NPS offers a unique EEE (Exempt-Exempt-Exempt) tax status. Contributions are tax-deductible under Section 80C (up to ₹1.5 lakh) and an additional exclusive deduction up to ₹50,000 under Section 80CCD(1B). The returns earned are exempt from tax, and the lump-sum withdrawal at maturity (up to 60%) is also tax-free.

An annuity is a financial product, typically sold by insurance companies, that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees. In the context of NPS, you use a part of your corpus to buy an annuity plan that will provide you with a monthly pension.