What is the NPS Calculator?
The National Pension System (NPS) is a government-backed retirement product that combines equity, corporate bonds and government debt in one professionally-managed portfolio. The FinanceDeck NPS Calculator projects the total corpus at retirement and splits it into the 60% lumpsum you withdraw and the 40% used to buy a monthly pension.
NPS suits salaried people who want an additional ₹50,000 tax deduction under Section 80CCD(1B) (in the old regime) and a low-cost, disciplined retirement plan. Costs are among the lowest in the world — under 0.1% for most schemes.
How does it work?
The calculator compounds your monthly contribution at the expected annual return through to retirement. On maturity, 60% is available as tax-free lumpsum and the remaining 40% must buy an annuity — a monthly pension whose amount depends on the annuity provider's rate.
Change the annuity rate to see how pension varies between providers. Even a 1% difference in annuity rate shifts your monthly pension by 15–20% over a 20+ year retirement.
Corpus = M × ((1 + i)^n − 1) / i × (1 + i); Pension = 40% × Corpus × annuity/100 / 12Example
Contribute ₹5,000 monthly for 25 years at 10% expected return.
Corpus grows to approximately ₹66.9 lakh. Lumpsum (60%) = ₹40.1 lakh, annuity corpus (40%) = ₹26.8 lakh. At 6% annuity rate, monthly pension is about ₹13,378 for life.
Benefits
- ✓Additional ₹50,000 deduction under 80CCD(1B)
- ✓Ultra-low fund management fees
- ✓Professional multi-asset diversification
- ✓Portable across jobs and cities
- ✓Government-regulated retirement product
Frequently Asked Questions
Is NPS better than PPF?
NPS offers higher expected returns but forces 40% into an annuity. PPF is fully liquid at maturity and tax-free. Most planners recommend using both.
Can I withdraw before 60?
Only 25% of your contribution is allowed as partial withdrawal for specific purposes (child education, home, medical). Full exit before 60 is limited to 20% lumpsum + 80% annuity.
Is the pension taxable?
The 60% lumpsum is fully tax-free. The monthly pension from the annuity is taxable at slab rate.
Which fund manager should I choose?
Returns are broadly similar across PFMs. Pick one with consistent long-term performance and stick with it — switching too often defeats compounding.
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