Find your NPS savings at retirement, and the part you must use to buy a pension plan (annuity).
Monthly contributions compound at your assumed return, the same way a SIP does.
At least 40% of the final corpus must currently be used to purchase an annuity.
Corpus: SIP-style compounding of monthly contributions
Min annuity: 40% of corpus
The National Pension System is a market-linked retirement account regulated by PFRDA. You contribute regularly, the money is invested in equity, corporate bonds and government securities, and at exit a part of the corpus must buy an annuity. This calculator estimates both sides of that picture: how large your NPS corpus may be at retirement, and how it divides into the annuity portion and the portion you can withdraw.
NPS suits salaried employees whose employer offers it, and self-employed people who want a disciplined retirement product with low fund charges. The calculator answers two questions. What might I accumulate if I keep contributing this much? And of that, how much will be converted into a pension and how much can I take as a lump sum?
1. Write down the monthly contribution P, the assumed annual return R and the years to retirement Y.
2. Convert to a monthly rate i = R ÷ 12 ÷ 100 and a number of months n = 12 × Y.
3. Find the corpus: FV = P × ((1 + i)^n − 1) ÷ i × (1 + i).
4. Total invested = P × n; estimated gain = FV − P × n.
5. Minimum annuity portion = 40% of FV, as the calculator applies it.
6. Lump sum you can withdraw = FV − annuity portion.
Monthly NPS contributions buy units in your chosen schemes, just as a SIP buys mutual fund units. If the portfolio grows at a steady monthly rate, each contribution compounds for the months remaining until retirement. Adding them gives the future value of an annuity due, the same formula used for SIPs. The multiplication by (1 + i) reflects the assumption that each contribution is made at the start of the month and grows for a full month before the next one.
Unlike PPF, NPS has no declared rate. Your actual return depends on the asset mix you choose, or the auto choice by age, and on how markets perform. A portfolio heavy in equity can swing sharply in a single year. Over long periods, a mixed portfolio has historically earned more than fixed deposits, but not every year. It is wise to run the calculator at a cautious rate and an optimistic rate, and plan around the cautious one.
At normal exit, the NPS rules require a minimum share of the corpus to buy an annuity from an empanelled insurer, and the rest can be withdrawn. This calculator applies a 40% minimum annuity share. PFRDA sets and revises these exit rules, including the share and any thresholds for small corpora, so confirm the rule in force when you actually exit. You may also choose to annuitise more than the minimum if a higher pension suits you.
Arjun, 30, works at a private firm and wants to contribute ₹8,000 a month to NPS until he turns 60, assuming a 9% annual return from a mixed portfolio.
Answer: Total corpus at retirement ₹1,47,55,792; Minimum must be annuitised (40%) ₹59,02,317; Withdrawable as lumpsum ₹88,53,475
Treating the assumed return as guaranteed and planning retirement on the most optimistic number.
Forgetting that the annuity portion is not available as cash; only the pension from it is.
Ignoring inflation, which means a corpus worth crores in thirty years will buy far less than it would today.
Stopping contributions for years and still expecting the projected corpus.
Mixing up tier-I, which is the retirement account modelled here, with tier-II, which is a flexible savings account.
Deciding how much to contribute each month toward retirement.
Estimating how much of the final corpus will be available as a lump sum.
Comparing NPS with PPF or a long-term equity SIP.
Checking whether an employer NPS contribution closes a retirement gap.
Is the NPS return guaranteed like PPF?
No. NPS returns depend on the market, so the rate you choose here is just a guess, not a promise. This is different from PPF, which has a fixed rate set by the government.