NPS Corpus Calculator

## What is the NPS Corpus Calculator? The NPS Corpus Calculator estimates the pension corpus you will accumulate in the National Pension System by your retirement age. NPS is one of the best retirement savings tools for salaried employees — your employer contributes 10% of your basic + DA (free money), you get tax deductions on your own contribution, and the accumulated corpus gets two-thirds as a tax-free lump sum with one-third used to buy an annuity for monthly pension. ## Formula Used Corpus = P x ((1+r)^n - 1) / r x (1+r) Where: P = Total monthly contribution (employee + employer) r = Expected annual return / 12 n = Total months of contribution At retirement: - 60% of corpus can be withdrawn as lump sum (tax-free) - 40% must be used to buy an annuity (monthly pension) ## Worked Example Monthly contribution: Rs 10,000 + Employer: Rs 10,000 = Rs 20,000/month Expected return: 10% p.a., Age: 30, Retirement at 60 (30 years = 360 months) Corpus = Rs 4.98 crore 60% Lump Sum = Rs 2.99 crore (tax-free withdrawal) 40% Annuity Corpus = Rs 1.99 crore At 6% annuity rate: Monthly pension approximately Rs 99,500 ## Frequently Asked Questions 1. How is NPS pension calculated at retirement? At retirement (age 60), you can withdraw up to 60% of your NPS corpus as a tax-free lump sum. The remaining 40% must be used to purchase an annuity from an IRDAI-regulated life insurance company. 2. What is the current NPS return rate? NPS Tier 1 returns have historically been 8 to 10% p.a. The actual return varies based on how your contribution is allocated across four fund options: Equity (E), Corporate Bonds (C), Government Securities (G), and Alternative Assets (A). 3. How much pension will I get from Rs 1 crore NPS corpus? Using a 6% annuity rate for a 60-year-old: monthly pension = (Rs 40,00,000 x 6% / 12) = Rs 20,000/month approximately. 4. Is NPS better than PPF for retirement? NPS offers market-linked returns (with equity option) versus PPF guaranteed 7.1%. NPS has a mandatory annuity purchase (40% of corpus), which is good for guaranteed pension but limits flexibility. 5. Can I withdraw my full NPS corpus as lump sum? No, as per current rules, at least 40% of the NPS corpus must be used to buy an annuity at retirement. However, if your total corpus is less than Rs 5 lakh at retirement, you can withdraw 100% as lump sum.