NPS Calculator

The National Pension System (NPS) is a long-term investment product backed by the Indian government and regulated by the Pension Fund Regulatory and Development Authority (PFRDA). You can invest in this scheme during your working years. Thereafter, at maturity, you can withdraw 60% of the accumulated corpus as a lump sum amount. The remaining 40% of the corpus must be converted into an annuity product, from which you will receive regular pension payouts.

To make an informed decision about how much to invest in the NPS and how long to remain invested, you can use the NPS calculator online.

One of the most important details required to choose or reject an investment option is the potential return it can generate for you. With a long-term product like the National Pension System, you need to know how much your investments may grow over time. This will help you understand whether the corpus will be sufficient for your post-retirement financial needs.

You also need to assess how much your monthly pension from the NPS scheme could be. This way, you can set up additional sources of income for your post-retirement life as needed. The National Pension System calculator helps you evaluate these crucial details.

By providing a few basic inputs like the investment per month, expected annual returns and your age, you can use the National Pension Scheme calculator to find the total amount invested, the interest you can earn on that amount, your final maturity amount and the minimum annuity amount.

The NPS calculator uses the NPS formula to find the total maturity amount you can expect from your investments. For this purpose, it is typically assumed that you will invest in the scheme till the age of 60 years. Thereafter, 60% of this amount is determined to be the lump sum withdrawal, while 40% is calculated as the annuity amount. The pension you will receive monthly depends on the annuity rate you choose.

Let us take a closer look at the NPS formula, which helps find the amount at maturity.

A = P (1 + r/n)nt

Here,

A is the maturity value of your NPS investments

P is the principal amount invested

r is the expected rate of interest per annum

n is the frequency of compounding

t is the investment tenure in years

For example, say you are 20 years old today and wish to invest Rs. 10,000 per month in your NPS account. You expect a return of 9% per annum and want to remain invested till the age of 60. Using the NPS formula, you can find that the total maturity amount will come up to around Rs. 4,71,64,302.

60% of this corpus will be withdrawn, while 40% will be converted into an annuity. This 40% amounts to Rs. 1,88,65,720. Now, assuming an annuity rate of 6%, you will receive Rs. 11,31,943 as pension per annum (i.e. 6% of Rs. 1,88,65,720). This is essentially a monthly pension of Rs. 94,329.

Using the NPS calculator on the Motilal Oswal Research 360 platform is quick and easy. Here is an overview of what needs to be done.

• Step 1: Enter the amount you wish to invest in your NPS account each month.
• Step 2: Enter the expected annual returns. This is an estimation because future returns cannot be predicted
• Step 3: Enter your current age. This is necessary to determine the investment tenure, assuming you plan to invest till the age of 60.
• Step 4: Submit these details.

The National Pension Scheme calculator will then use these inputs to find the total amount invested, the interest you will earn on this investment, the maturity amount and the minimum amount of annuity required.

• Quick and Accurate Calculations

  You can use the NPS calculator online to accurately check how much your investments may grow over time. Although the rate expected may be an assumption, the calculations and outputs are error-free, so you can make smarter investment decisions based on the results.

• Post-Retirement Tax Planning

  The NPS calculator also makes post-retirement tax planning a breeze. By checking the amount of annuity income you may receive monthly, you can get a clearer idea of your taxable income after you have retired. This can help you plan ahead for any potential tax-saving investments if required.

• Investment Optimisation

  By adjusting variables like the investment amount and the expected rate, you can see how different investment aspects can impact your final retirement corpus. The NPS calculator can also be used any number of times, without any charges or fees. This helps you make informed decisions about your investment approach.

• Comparing Investment Alternatives

  While the NPS calculator focuses on the National Pension System, its results can serve as a benchmark for comparing other investment options. You can use the projected returns to evaluate how NPS might perform against other retirement-oriented investment vehicles.