NPS Calculator
Estimate your NPS retirement corpus, lump-sum payout and monthly pension. Enter your monthly contribution, expected return and tenure.
Formula last reviewed 15 September 2026 · How we verify our calculators
Total corpus at retirement
- Lump-sum withdrawal (60%, tax-free)
- ₹68,37,976
- Annuity purchase (40%, mandatory)
- ₹45,58,651
- Monthly pension (from annuity)
- ₹22,793
- Extra 80CCD(1B) tax deduction
- ₹50,000
Updates live as you type
Frequently asked questions
NPS is a market-linked retirement account regulated by the PFRDA, in which your contributions are invested across equity, corporate bonds and government securities by a fund manager you select. Unlike EPF or PPF there is no guaranteed rate — the corpus depends on market performance. Tier I is the retirement account, locked until 60 and tax-deductible; Tier II is a voluntary liquid account with no lock-in and, for most subscribers, no tax benefit at all.
Regulation requires at least 40% of the Tier I corpus to be used to buy an annuity that pays you a monthly pension for life; you may withdraw up to 60% as a tax-free lump sum. On a corpus of 1,13,96,627 that means 68,37,976 in hand and 45,58,650 converted into an income stream. The exception is a corpus of 5,00,000 or less, which may be withdrawn entirely. This mandatory annuitisation is the defining feature of NPS and the part most projections leave out.
Monthly pension = annuity corpus x annuity rate / 12. The critical point is that the annuity rate is not your investment return — it is the rate a life insurer quotes you at the moment you retire, typically between 5.5% and 7%. At 6% on an annuity corpus of 45,58,650, the pension is about 22,793 a month. At 5.5% it drops to 20,894 and at 7% it rises to 26,592, so a factor entirely outside your control moves your lifetime income by more than a quarter.
Three, of which one matters especially now. Contributions count within the 1.5 lakh Section 80C limit; an additional 50,000 is deductible under Section 80CCD(1B), over and above 80C; and employer contributions up to 14% of basic plus DA are deductible under Section 80CCD(2). That last one survives in the new tax regime, where almost nothing else does, which makes restructuring salary to include an employer NPS contribution one of the few remaining tax levers for new-regime taxpayers.
No. The 60% lump sum withdrawn at 60 is tax-free, and buying the annuity is not itself a taxable event, but the pension the annuity pays is fully taxable at your slab rate every year for life. NPS is therefore EET — exempt, exempt, taxed — rather than EEE like PPF and EPF. Comparisons that describe NPS as a tax-free retirement product are simply wrong on this point; you are deferring tax on the annuity portion, not escaping it.
Something in the 9% to 11% range for a long horizon. Equity allocation is capped at 75% under the Active choice and tapers automatically with age under the Auto choice, so the portfolio is a blend rather than pure equity and will not match an equity fund's long-run return. Assumptions above 12% are not realistic for NPS specifically because of that structural cap. Run the projection at 9% as well to see how sensitive your plan is.
Only in limited ways. Partial withdrawal is allowed after three years, capped at 25% of your own contributions — not the employer's, and not the accumulated returns — and only for specified purposes such as higher education, marriage, buying a house or serious illness. Full premature exit is permitted but requires 80% of the corpus to be annuitised, leaving just 20% as a lump sum, which makes it a poor option other than in genuine hardship.
Standard annuity options pay a level amount for life with no indexation at all. A pension of 22,793 a month starting thirty years from now would buy roughly what 4,000 buys today at 6% inflation, and it will keep shrinking in real terms throughout retirement. Increasing annuities that rise a few percent annually do exist, but they start from a substantially lower base. Plan on the assumption that the pension covers a falling share of your costs as retirement progresses.
It depends entirely on the annuity variant you choose at 60, and this is a decision made once and irreversibly. A life annuity without return of purchase price pays the most per month but leaves nothing to your family. A joint-life option continues paying your spouse. Return-of-purchase-price variants pay less monthly but return the annuity corpus to your nominee. Rates and terms vary meaningfully between insurers, so it is worth comparing carefully rather than accepting the default offered.
A corpus you cannot fully take home
Contribute ₹5,000 a month for 30 years at an expected 10% and the NPS corpus reaches ₹1,13,96,627. But the number that matters is not that one. At retirement you may withdraw 60% as a tax-free lump sum — ₹68,37,976 — while the remaining ₹45,58,650 must buy an annuity, which at a 6% annuity rate pays about ₹22,793 a month for life.
That mandatory split is the defining feature of the National Pension System and the thing most projections gloss over. NPS is a market-linked retirement account regulated by the PFRDA, in which your contributions are invested across equity, corporate bonds and government securities by a fund manager you choose. It is not a guaranteed-return product like EPF or PPF; the corpus depends on market performance. What it adds in exchange is a genuinely large tax deduction and low costs.
Two sub-accounts exist. Tier I is the retirement account — locked until 60, tax-deductible, and what this calculator models. Tier II is a voluntary, fully liquid account with no lock-in and, for most subscribers, no tax benefit at all. Money in Tier II is not retirement money in any meaningful sense.
How the corpus and the pension are derived
The accumulation is an ordinary monthly annuity-due, identical in form to a SIP:
Corpus = P × [((1 + i)ⁿ − 1) / i] × (1 + i)
where P is the monthly contribution, i the monthly rate (annual ÷ 12 ÷ 100) and n the number of months.
At retirement the corpus splits by regulation:
Annuity corpus = Corpus × annuity % (minimum 40%) Lump sum = Corpus − annuity corpus (maximum 60%)
And the pension follows from the annuity rate the insurer offers:
Monthly pension = Annuity corpus × annuity rate ÷ 12
That last formula deserves attention because it is where the plan's real uncertainty sits. The annuity rate is not your investment return — it is the rate a life insurer will quote you at the moment you retire, typically between 5.5% and 7%. You are locking a large sum into that rate for life, decades from now, with no ability to forecast it today.
Thirty years at ₹5,000 a month
P = 5,000, i = 0.10 ÷ 12 = 0.008333, n = 360.
Step 1. (1.008333)³⁶⁰ = 19.837.
Step 2. (19.837 − 1) ÷ 0.008333 = 2,260.5.
Step 3. × 1.008333 = 2,279.3.
Step 4. 5,000 × 2,279.3 = ₹1,13,96,627.
You contributed 5,000 × 360 = ₹18,00,000. The remaining ₹95,96,627 is return — the corpus is more than six times what you put in, which is what a thirty-year horizon at 10% does.
Now the split at 40% annuity.
- Lump sum (60%): ₹68,37,976, received tax-free.
- Annuity corpus (40%): ₹45,58,650.
- Monthly pension: 45,58,650 × 0.06 ÷ 12 = ₹22,793.
The annuity rate's leverage. Hold everything else and change only the annuity rate. At 5.5% the pension is ₹20,894; at 7% it is ₹26,592. A 1.5-point difference — entirely outside your control, determined by interest rates in the year you happen to retire — moves your lifetime monthly income by more than 27%.
If you annuitise everything (permitted, and sometimes chosen for maximum income): the full ₹1,13,96,627 buys a pension of ₹56,983 a month, with no lump sum at all.
Who NPS suits
Anyone with taxable income above the 80C ceiling. The ₹50,000 deduction under Section 80CCD(1B) is over and above the ₹1.5 lakh 80C limit — one of the few genuinely additional deductions left in the old regime.
Salaried employees whose employer contributes. Employer contributions up to 14% of basic plus DA are deductible under Section 80CCD(2), and — importantly — this one survives in the new tax regime, where almost nothing else does. For anyone on the new regime, restructuring salary to include an employer NPS contribution is among the few remaining tax levers.
Younger subscribers, who can hold a high equity allocation for decades and who will reach 60 with enough corpus that the 40% annuity still leaves a substantial lump sum.
It suits you poorly if you need flexibility. The lock-in until 60 is real, partial withdrawals are limited to 25% of *your own* contributions after three years and only for specified reasons, and the compulsory annuity means a portion of your money is permanently converted into an income stream you cannot reverse or bequeath in the same way.
Reading the four numbers
The corpus is a projection from your assumed return, and NPS returns are market-linked. The equity allocation is capped at 75% under the Active choice and tapers automatically with age under Auto choice, so a blended long-run assumption of 9–11% is reasonable; 12%+ is not.
The lump sum is tax-free on withdrawal at 60 — up to the 60% ceiling.
The annuity corpus is not taxed when it buys the annuity, but the pension it pays is fully taxable at your slab rate every year for life. NPS is therefore EET, not EEE: you are deferring tax on this portion, not escaping it. Comparisons that treat NPS as tax-free alongside PPF are simply wrong on this point.
The monthly pension is the number to stress-test hardest. It assumes an annuity rate you cannot know today, and most standard annuity options pay a level amount for life — no inflation indexation at all. ₹22,793 a month thirty years from now will buy roughly what ₹4,000 buys today at 6% inflation. Plan for the pension to cover a shrinking fraction of your costs as retirement progresses.
Where expectations go wrong
Treating the corpus as the outcome. Only 60% is yours to deploy. The rest becomes an income stream at a rate set by someone else.
Assuming the pension keeps pace with prices. Standard annuities do not index. Options that increase annually exist but start much lower.
Ignoring that pension income is taxable. The deduction you took during your career is repaid, slowly, out of every pension payment.
Choosing the annuity provider casually at 60. Rates vary meaningfully between insurers and between annuity variants — return of purchase price, joint life, increasing. It is the single largest financial decision in the whole scheme and it is made once, irreversibly.
Overlooking 80CCD(2) under the new regime. Employees who moved to the new regime often assume all retirement tax benefits vanished. The employer contribution route did not.
Comparing NPS to PPF on returns alone. They differ on guarantee, liquidity, taxation at exit and what happens to the money after you die. NPS can outperform on return and still be the wrong choice for someone who needs access.
Ignoring the choice of fund manager and allocation. NPS lets you pick among several pension fund managers and choose between Active allocation, where you set the equity/corporate-debt/government-securities split yourself within the 75% equity cap, and Auto, where the equity share tapers automatically as you age. Returns across managers have differed by a percentage point or more over long periods, which compounds into a substantial gap across thirty years. Both the manager and the allocation can be changed later at no cost, yet most subscribers never revisit the defaults assigned when they joined.
Sources
- Pension Fund Regulatory and Development Authority (PFRDA) — NPS withdrawal and annuity rules
- Income Tax Act 1961, Sections 80CCD(1B) and 80CCD(2)