NPS Calculator

Enter your monthly NPS contribution, expected return, and years to retirement to estimate your corpus, lump sum, and monthly pension.

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Monthly contribution (Rs.)

Expected return (% p.a.)

Years to retirement

Annuity share (min. 40%)

Annuity rate (% p.a., typically 6-7%)

Total corpus at retirement	Rs. 1,32,68,334
Tax-free lump sum	Rs. 79,61,000
Annuity purchase amount	Rs. 53,07,334
Estimated monthly pension	Rs. 26,537

NPS returns are market-linked and never guaranteed. Actual annuity rates are set by insurance companies at the time of purchase, not fixed in advance. This is a planning estimate only.

The formula

Corpus = P x [((1+r)^n - 1) / r] P = monthly contribution, r = monthly return (annual/12/100), n = months Annuity amount = Corpus x Annuity share % (minimum 40%) Lump sum = Corpus - Annuity amount (tax-free up to 60% of corpus) Monthly pension = Annuity amount x Annuity rate % / 12

Example

Rs. 10,000/month for 25 years at an expected 10% return: corpus of about Rs. 1.33 crore. Taking the minimum 40% annuity at a 6% rate gives roughly Rs. 26,537/month pension, with the remaining 60% (about Rs. 79.6 lakh) as a tax-free lump sum.

Step-by-step guide

Enter your monthly contribution and expected annual return (NPS allows equity exposure, so returns vary by your chosen asset allocation).
Enter your years remaining until retirement (typically until age 60).
Set your annuity share (minimum 40% is mandatory at normal retirement) and an assumed annuity rate, then review your projected corpus, lump sum, and pension.

Why the lump sum vs. annuity split is partly a tax decision

At normal retirement (age 60), NPS rules require a minimum 40% of your corpus to purchase an annuity, which then pays a monthly pension - up to 60% can be taken as a lump sum. The lump-sum portion is fully tax-free, and the amount used to buy the annuity isn't taxed at the time of purchase either. But the monthly pension you later receive from that annuity IS taxable as ordinary income each year you receive it. This means choosing to annuitize more than the mandatory 40% doesn't just affect your monthly income - it also creates an ongoing tax liability that a larger lump sum wouldn't.

Common mistakes

Treating the assumed annuity rate as fixed or guaranteed - actual annuity rates are set by the insurance company at the time you actually purchase the annuity, years from now, and can differ meaningfully from today's rates.

Forgetting that the monthly pension itself is taxable income - only the lump-sum withdrawal and the annuity purchase amount are tax-free; the ongoing pension is taxed at your applicable slab rate when received.

Frequently asked questions

Can I withdraw more than 60% as a lump sum?

At normal retirement (age 60), no - a minimum 40% must go toward annuity purchase. However, non-government subscribers with a very small total corpus may qualify for full withdrawal without mandatory annuitization under certain PFRDA thresholds - check current rules for your situation.

What happens if I exit NPS before retirement age?

Premature exit (before age 60) has stricter rules - typically at least 80% of the corpus must go toward annuity purchase, with only 20% available as a lump sum, a much less favorable split than normal retirement.

Is NPS better than PPF for retirement savings?

They serve different roles - NPS offers potentially higher, market-linked returns through equity exposure plus an extra tax deduction, while PPF offers a fixed, guaranteed, fully tax-free return with more liquidity. Many planners suggest using both rather than choosing one exclusively.

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