Updated June 2026

NPS Calculator

How much will your NPS corpus be at retirement? See the lump sum vs annuity split, your estimated monthly pension, and what it's actually worth after inflation eats into it.

Monthly Contribution

₹

Current Age

yrs

Retirement Age

yrs

Expected Return Rate (p.a.)

Annuity Purchase (%)

Expected Annuity Rate (p.a.)

Adjust for Inflation

Inflation Rate

Total Contributed

Returns Earned

Total Corpus at 60

₹1.14 Cr

Lump Sum (tax-free)

₹68.38 L

Annuity Corpus

₹45.59 L

Est. Monthly Pension

₹22,793

Total Invested

₹18.00 L

Value in today's rupees (6% inflation)

₹19.84 L

Your ₹1.14 Cr corpus is worth ₹19.84 L in today's purchasing power. Your monthly pension of ₹22,793 will feel like ₹3,968 today. That's 83% less than the headline number.

NPS Corpus Growth

Corpus Value

Contributed

Real Value

How NPS Works

The National Pension System (NPS) is a defined-contribution pension scheme regulated by PFRDA. You contribute monthly from your working years, the money is invested in a mix of equity, corporate bonds, and government securities, and at retirement you receive a portion as lump sum and the rest as monthly pension.

NPS Corpus Calculation Formula

NPS uses compound interest on monthly contributions:

FV = P × [((1+r)ⁿ - 1) / r] × (1+r)

Where P = monthly contribution, r = monthly rate of return, n = total months until retirement.

The 60-40 Split at Retirement

At age 60, PFRDA rules require you to use at least 40% of your corpus to purchase an annuity (pension plan). The remaining up to 60% can be withdrawn as a tax-free lump sum. You can choose to put more than 40% into annuity if you want a higher monthly pension.

For example, if your NPS corpus is ₹1 crore at retirement:

Lump sum (60%): ₹60 lakh: completely tax-free since Budget 2019
Annuity (40%): ₹40 lakh → at 6% annuity rate = ~₹20,000/month pension (taxable as income)

NPS Tax Benefits (Section 80CCD)

NPS offers one of the best tax deductions available:

80CCD(1): Your own contribution: up to 10% of salary (max ₹1.5 lakh, shared with 80C)
80CCD(1B): Additional ₹50,000 over and above the 80C limit: exclusive to NPS
80CCD(2): Employer contribution: up to 14% of salary for central govt, 10% for others (no cap)

At 30% tax bracket, the 80CCD(1B) deduction alone saves you ₹15,600/year in taxes.

What Makes This Calculator Different

Most NPS calculators show you a large number at retirement and call it a day. But that number is in future rupees: not today's purchasing power. At 6% inflation over 30 years, ₹3 crore at retirement buys what ~₹52 lakh buys today.

Our inflation toggle reveals the reality: your estimated monthly pension of ₹50,000 might only feel like ₹8,700 in today's terms over a 30-year horizon. This helps you decide whether NPS alone is enough, or whether you need SIP/PPF alongside.

How to Use This NPS Calculator

Enter your monthly NPS contribution amount
Set your current age and planned retirement age
Choose expected return rate (10% is reasonable for equity-heavy allocation)
Adjust the annuity percentage (40% minimum, you can go higher for more pension)
Set the expected annuity rate (6% is typical from insurers)
Toggle inflation to see the real value of your retirement corpus and pension

Frequently Asked Questions

What is NPS (National Pension System)?

NPS is a government-backed retirement savings scheme regulated by PFRDA. It allows salaried and self-employed individuals to build a pension corpus through regular contributions invested in equity, corporate bonds, and government securities.

What is the minimum and maximum NPS contribution?

The minimum contribution is ₹500 per month or ₹6,000 per year for Tier I. There is no upper limit on contributions, though tax deductions are capped: ₹1.5 lakh under 80CCD(1) within the 80C limit, plus an additional ₹50,000 under 80CCD(1B).

How much of the NPS corpus can I withdraw at retirement?

At age 60, you can withdraw up to 60% of the corpus as a tax-free lump sum. The remaining minimum 40% must be used to purchase an annuity plan from a PFRDA-empaneled insurance company, which provides monthly pension income.

Is NPS withdrawal tax-free?

Yes, since Budget 2019, the entire 60% lump sum withdrawal at maturity is tax-free. However, the monthly pension income from the annuity portion is taxable as regular income under your applicable slab.

What are the NPS tax benefits?

You get three tax deductions: (1) Up to ₹1.5 lakh under Section 80CCD(1) as part of the 80C limit, (2) Additional ₹50,000 under Section 80CCD(1B), and (3) Employer contribution up to 14% of salary (central govt) or 10% (others) under 80CCD(2): no upper limit.

What returns can I expect from NPS?

NPS returns depend on your asset allocation. Historically, equity (E) has given 10-12% CAGR, corporate bonds (C) around 8-10%, and government securities (G) around 7-9%. A balanced 50:30:20 (E:C:G) allocation has delivered ~10% over 10+ years.

What is the difference between NPS Tier I and Tier II?

Tier I is the primary pension account with a lock-in until age 60 (partial withdrawal allowed after 3 years for specific purposes). Tier II is a voluntary savings account with no lock-in: you can withdraw anytime, but it doesn't get the 80CCD(1B) tax benefit (except for government employees).

How does the annuity work in NPS?

At retirement, you use the annuity portion to buy a pension plan from insurers like LIC, SBI Life, etc. The annuity rate (typically 5-7%) determines your monthly pension. For example, ₹50 lakh annuity at 6% = ₹25,000/month pension. This pension is taxable as income.

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