Project your National Pension System corpus and then split it the way the rules require: at least 40% into an annuity, the rest as a tax-free lump sum. See the monthly pension that annuity buys and what the extra ₹50,000 deduction is worth.
Step 1
Set your contribution and horizon
NPS runs to 60 by default and can be deferred to 75. The longer it runs, the less the annuity has to cover.
Step 2
Choose an expected return
This depends on your equity–debt allocation. An aggressive lifecycle fund has historically returned around 10%.
Step 3
Decide the annuity split
Forty percent is the statutory minimum. Anything above that trades a lump sum for a larger monthly pension.
Corpus at age 60
₹2,27,93,253
Built over 30 years of contributions, before the mandatory annuity split.
Tax-free lump sum
₹1,36,75,952
60% of the corpus, withdrawn tax-free at exit.
Monthly pension
₹45,587
From ₹91,17,301 locked into an annuity.
Tax saved under 80CCD(1B)
₹4,50,000
₹15,000 a year on the extra ₹50,000 deduction, over 30 years.
Two phases with a hard rule between them. Contributions compound until exit, then the corpus is split — the annuitised share buys a lifelong income and the rest is withdrawn.
Corpus = C × ((1 + i)ⁿ − 1) ÷ i × (1 + i)
Annuity corpus = Corpus × annuity share
Lump sum = Corpus − Annuity corpus
Monthly pension = Annuity corpus × annuity rate ÷ 12Monthly contribution
Increased each year if you set a step-up.
Monthly return rate
The expected annual return divided by 12 and by 100. A 10% return gives i ≈ 0.00833.
Months to exit
From your current age to your exit age.
Portion annuitised
At least 40% by law. The rest is withdrawable tax-free.
Insurer's annuity rate
What the annuity pays each year on the purchase amount. Typically 5.5% to 6.5% on a lifetime plan.
The corpus is the headline figure but the lump sum is the number that matters, because it is the only part you can actually deploy. On a 40% annuity split, only 60% of what you see is yours to touch.
Answers about the nps calculator.
Continue exploring adjacent tools in this topic.
Background reading on the ideas behind these numbers.
This tool is provided for educational purposes only. Results are estimates based on the values you enter and do not constitute financial advice.