NPS Calculator
Project your National Pension System (NPS) corpus at retirement. Based on your monthly contribution, age, expected returns, and annuity choice, this calculator shows your final corpus, the tax-free lumpsum portion, and the monthly pension you can expect from the annuity.
How this calculator works
NPS is a market-linked, defined-contribution retirement scheme regulated by PFRDA. It offers the lowest fund management cost in India (0.03-0.09%) and flexibility in equity-debt allocation.
The two accounts
- Tier-I — the main retirement account. Lock-in till age 60. Tax-deductible contributions up to ₹2 lakh (₹1.5 lakh under 80C + ₹50,000 under 80CCD(1B)). This calculator projects Tier-I.
- Tier-II — voluntary savings, no lock-in, but no tax benefits. Acts like a flexible investment account.
Equity-debt allocation
NPS offers two investment choices: Active Choice (you pick the split up to 75% equity till age 50, then auto-glides) and Auto Choice (automatic glide path based on age, three aggressiveness levels). Expected long-term returns: 10-12% with aggressive equity exposure, 8-9% with balanced allocation.
At retirement
At age 60, you can withdraw up to 60% as tax-free lumpsum. The remaining 40% must buy an annuity from an IRDA-registered insurer. Annuity rates in India 2026 are typically 5.5-6.5% per annum, with options for joint-life, return of purchase price, increasing annuity, etc.
Worked example
Example — 30-year-old investing ₹10,000/month till age 60:
- Monthly contribution: ₹10,000
- Duration: 30 years (360 months)
- Expected return: 10% p.a.
- Total invested: ₹36,00,000
- Corpus at 60: approximately ₹2,28,03,000 (₹2.28 crore)
- Returns portion: ₹1.92 crore (5.3× invested)
At retirement:
- Lumpsum (60%): ₹1,36,82,000 — fully tax-free
- Annuity portion (40%): ₹91,21,000
- Monthly pension at 6% annuity rate: approximately ₹45,600
Comparison: the same ₹10,000/month in PPF for 30 years (at 7.1%) would grow to only ₹1.23 crore — far less, because PPF returns are much lower than NPS equity-linked returns.
Frequently asked questions
How does NPS compare to EPF or PPF?
NPS typically delivers higher returns due to equity exposure (up to 75%) vs EPF (8.25%, debt-only) and PPF (7.1%, debt-only). Over 30 years, NPS corpus can be 80-100% larger. Trade-off: NPS mandates 40% annuity at retirement; EPF and PPF are fully withdrawable.
Is NPS tax-free?
Partially. Contributions up to ₹2L/year are tax-deductible under the old regime (80C + 80CCD(1B)). Under the new regime, only employer NPS contributions under 80CCD(2) get deduction. At retirement, 60% lumpsum is fully tax-free. The 40% annuity is taxable each month as income per your slab.
Can I withdraw before age 60?
Partial withdrawals (up to 25% of your own contribution) are allowed after 3 years for specified reasons — home purchase, higher education, serious illness, child marriage. Full premature exit is possible but 80% must be annuitized, only 20% lumpsum.
What is the mandatory 40% annuity?
At age 60, you must use at least 40% of your NPS corpus to buy an annuity from an IRDA-registered life insurer. This provides you a monthly pension for life. You can withdraw the remaining 60% as tax-free lumpsum or use more for annuity if you want.
What annuity rate should I assume?
Indian annuity rates in 2026 range from 5.5% (simple life annuity) to 6.5% (return of purchase price). Joint-life annuities pay slightly less (5-5.5%). Rates depend on age at purchase, gender, and annuity type.
Should I choose Active or Auto Choice?
Active Choice gives control — aggressive investors can maintain 75% equity till age 50 then gradually reduce. Auto Choice is simpler with three risk levels (LC75/LC50/LC25 — aggressive/moderate/conservative). Most investors under 45 should pick Active with 75% equity.
How does NPS compare to UPS (Unified Pension Scheme)?
UPS is available from April 2025 for central government employees. It guarantees 50% of last drawn salary as pension (with 10+ years service), unlike NPS which is market-linked. Government contributes 18.5% (vs 14% in NPS). UPS is guaranteed but less flexible; NPS has higher upside but market risk.
Can I change my fund manager?
Yes. You can switch pension fund managers once a year. You can also change asset allocation (equity/corporate bonds/government securities) up to 4 times per year. Very low friction — no tax event on switching.