NPS Calculator
Plan your retirement with National Pension System investments
Investment Breakdown
Corpus Distribution
What Is NPS and How Does the Calculator Work?
The NPS calculator helps you estimate retirement savings under India's National Pension System, a government-sponsored pension scheme under PFRDA. By entering your monthly contribution, current age, retirement age, and expected returns, the calculator projects your total corpus at retirement, including the lump sum withdrawal and monthly pension amount you'll receive.
NPS offers two account types: Tier I (mandatory retirement account with tax benefits) and Tier II (voluntary savings). The calculator focuses on Tier I, which requires minimum 40% of corpus to purchase annuity for monthly pension, with remaining 60% available as tax-free lump sum withdrawal at retirement age 60.
How Much Tax Can You Save with NPS Contributions?
NPS offers attractive tax benefits under multiple sections. Under Section 80CCD(1), contributions up to 10% of salary qualify for deduction within the ₹1.5 lakh limit of Section 80C. Section 80CCD(1B) provides an additional ₹50,000 deduction exclusively for NPS, making total potential tax benefit ₹2 lakh annually.
Employer contributions to NPS qualify for deduction under Section 80CCD(2) up to 10% of basic salary for private employees (14% for government employees), without affecting 80C or 80CCD(1B) limits. This makes NPS one of the most tax-efficient retirement savings options available.
NPS Fund Performance Comparison
| Asset Class | Risk Level | Typical Returns |
|---|---|---|
| Equity (E) | High | 10-14% p.a. |
| Corporate Bonds (C) | Medium | 8-10% p.a. |
| Government Securities (G) | Low | 7-9% p.a. |
| Alternative Assets (A) | Medium-High | 9-12% p.a. |
What Happens to Your NPS Corpus at Retirement?
At age 60, you must use minimum 40% of accumulated corpus to purchase an annuity from PFRDA-empaneled insurance companies. This annuity provides guaranteed monthly pension for life. The remaining 60% can be withdrawn as tax-free lump sum. You may choose to allocate more than 40% to annuity for higher monthly pension.
Annuity rates typically range from 5-7% annually depending on the annuity type and provider. Options include life annuity, annuity with spouse continuation, or annuity with return of purchase price. Choose based on your family situation and income needs. For other investment calculations, see our RD calculator.
NPS Withdrawal Rules and Exit Options
Partial withdrawals are allowed after 3 years of subscription for specific purposes like children's education, marriage, home purchase, or medical treatment. Up to 25% of own contributions can be withdrawn (maximum 3 times). Premature exit before age 60 requires minimum 80% annuity purchase. Corpus below ₹2.5 lakh can be entirely withdrawn.
Frequently Asked Questions
What is an NPS calculator?
An NPS calculator estimates your retirement corpus and monthly pension based on monthly contributions, investment duration, and expected returns. It shows how much you'll accumulate in the National Pension System, the lump sum you can withdraw, and the pension amount from annuity purchase.
What is the minimum investment in NPS?
NPS Tier I requires minimum ₹500 per contribution with annual minimum of ₹1,000. Tier II has no minimum balance requirement. You can contribute any amount above these minimums through monthly SIP or lump sum investments.
Is NPS better than PPF for retirement?
NPS typically offers higher returns (8-14%) compared to PPF (7-8%) due to equity exposure. However, PPF is fully tax-free at maturity while NPS has partial taxation. NPS also requires mandatory annuity purchase. The choice depends on your risk appetite and retirement goals.
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Last Updated: January 2026 | Reviewed for accuracy