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NPS Calculator: Retirement Planning Demystified

The NPS Calculator is a straightforward tool that assists you in estimating your retirement corpus and monthly pension based on your payments to the National Pension System (NPS).. You can safeguard your financial future by making well-informed decisions by entering information like tenure, contribution amount, and predicted returns.

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Monthly Contribution

₹ 5000

Investment Duration

30 years

Expected Return Rate

10.00%

Future Value

₹ 0

Invested Amount

₹ 0

Returns Earned

₹ 0

Lump Sum Withdrawal

₹ 0

Monthly Pension

₹ 0

What is an NPS Calculator?

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A financial instrument called an NPS Calculator is used to estimate the retirement corpus and monthly pension that you can accrue under the National Pension System. It offers a thorough assessment of your financial security after retirement by taking into account your regular contributions, estimated rate of return, and annuity alternatives.

By providing clarity on how your NPS contributions increase and their effect on your financial freedom, this tool makes retirement planning easier.

How to Calculate NPS Returns?

Our NPS Calculator makes it simple to determine your NPS returns through a few simple steps :

1.

Enter the Contribution Amount :

Indicate the monthly amount you intend to contribute to your NPS account.

2.

Enter the Investment Duration:

Indicate how many years, up to your retirement age, you plan to invest.

3.

Select the Expected Rate of Return:

Enter the expected yearly rate of return for your NPS investment, which could consist of both debt and equity.

4.

Choose the Annuity Percentage:

Indicate the percentage of your corpus that will go towards an annuity following retirement.

4.

Enter the anticipated yearly return:

Input the expected return from the annuity plan

4.

Compute:

The calculator will make an estimate of:

  • Your entire retirement fund.
  • The amount that can be withdrawn in one lump sum.
  • The monthly pension (determined by annuity proportion).

You can modify your tenure or contributions in accordance with your post-retirement financial position by using this strategy.

Advantages of Using the NPS Calculator

The NPS Calculator is a vital tool for efficient retirement planning because it provides a number of advantages:

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Accurate Projections:

Based on your contributions and returns, realistic retirement projections provide you a comprehensive idea of your retirement corpus and monthly pension.

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Time-saving:

Provides immediate results with minimal inputs by doing away with the need for manual computations.

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Customisable Scenarios:

Lets you adjust your retirement plan by experimenting with various annuity percentages, rates of return, and contribution amounts

By using this calculator, you can stay aware of your financial goals and make informed decisions.

Formula to Calculate NPS Returns

The NPS calculator uses the compound interest formula to estimate the retirement corpus and an annuity formula to calculate the monthly pension. Here’s how it works:

1. Retirement Corpus Calculation:

FV = P ×(1 + r) n - 1 r× (1 + r)

Where:

  • FV = Future Value (Retirement Corpus)
  • P =Monthly Contribution
  • r =Monthly Rate of Return (Annual Rate of Return divided by 12)
  • n = Total Number of Contributions (Years to Retirement × 12)

2. Annuity Corpus and Monthly Pension:

After retirement, the total corpus is divided into:

  • Lump Sum Withdrawal: The portion available for one-time withdrawal.
  • Annuity Corpus: The portion allocated for purchasing an annuity.

The monthly pension is calculated using:

Monthly Pension = (Annuity Corpus × Annuity Rate) / 12​

The calculator uses these formulas to project:

  • Retirement Corpus: Total savings at retirement.
  • Lump Sum Withdrawal: 60% of the corpus.
  • Monthly Pension: Based on the annuity corpus and rate.

This structured calculation ensures accurate and actionable projections for your retirement planning.

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FD Calculator

Calculate the returns and maturity value of fixed deposits with customizable interest rates and durations.

SIP Calculator

Plan your investments in a Systematic Investment Plan and visualize the growth of your corpus over different time periods.

NPS Calculator FAQs

Your Questions, Answered

NPS Calculator can seem complex, but we’ve got you covered. Our comprehensive FAQ section answers common questions like:

Can I plan for retirement using the NPS calculator?

Yes, you can prepare for a financially comfortable retirement by using the NPS calculator to estimate your retirement corpus and monthly pension.

Can my retirement corpus be estimated using the NPS calculator?

Yes, the calculator projects the total corpus you would have by retirement based on your tenure, monthly contributions, and predicted returns.

How are tax benefits accounted for in the NPS calculator?

To optimise your investments, you can take into account tax benefits under Sections 80C and 80CCD(1B) independently, even if the calculator is primarily focused on forecasting returns and pensions. Please recognise that, in addition to the ₹1.5 lakh deduction allowed by Section 80C, payments to NPS under Section 80CCD(1B) permit an additional annual tax deduction of ₹50,000.

Can I use the NPS calculator to simulate varying contribution amounts?

Of course! To observe the effects on your retirement corpus and pension, you can change the amount of your monthly contributions.

Are government contributions taken into account by the NPS calculator?

No, government contributions are not included in the calculator. Your donations and anticipated profits are the only things it considers.

How precise are an NPS calculator's return projections?

Based on the inputs given, the forecasts are precise. However, fund performance and market conditions can affect actual returns.

Is it possible for the NPS calculator to show both debt and equity allocation?

Indeed, in order to replicate the performance of your NPS account, the predicted rate of return may represent a mixed stock and debt allocation.

Can all NPS account types be used with the NPS calculator?

Depending on your type of investment, the calculator can be used for both Tier I and Tier II NPS accounts.

Can I make wise investing choices with the NPS calculator?

Yes, the tool helps you make better financial decisions by clearly illustrating how contributions, tenure, and returns impact your corpus and pension.

When I retire, will I be able to withdraw my entire NPS corpus?

No, according to current regulations, one must use at least 40% of one's collected corpus to buy an annuity plan upon retirement.

The Pension Calculator on the Anand Rathi Share and Stock Brokers Ltd. website is for informational purposes only and should not be considered financial advice or a basis for investment decisions. Past performance does not guarantee future returns, and NPS investments are subject to market risks. Annuity plans are approved by relevant authorities and may change without notice. This tool should not be copied, shared, or used in any jurisdiction without prior approval. Users are advised to consult a financial expert before making any decisions. Anand Rathi Share and Stock Brokers Ltd. is not liable for any inaccuracies, omissions, or losses incurred.

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