NPS Calculator

NPS Calculator

The NPS calculator is a handy online tool that helps you estimate the maturity corpus of your NPS contributions. It considers the amount you invest, your age, and your investment strategy (Aggressive, Conservative, or Moderate). Based on these inputs, it calculates the maturity value of your investments and the pension amount you will receive from it.

Investing in the National Pension System involves allocating your investment to different asset classes such as equity, debt, and Government Securities, which makes it challenging to calculate the return on your own. The NPS calculator simplifies this process and provides a convenient way to determine the potential growth of your NPS investment.

How Does the NPS Work?

The NPS is a retirement savings scheme that allows you to invest your money in different asset classes. Professional fund managers manage your investments and aim to maximize your returns. The Pension Fund Regulatory and Development Authority (PFRDA) of India regulates the NPS, ensuring the safety and transparency of your investments.

NPS account holders must contribute at least INR 6000 per annum until they retire. They can also withdraw funds from their NPS accounts (partial funds and under certain conditions) if required. However, the remaining portion of the fund should be invested in an annuity for a regular income after retirement.

Let us understand in detail about the National Pension Scheme (NPS). We will also explain how our NPS calculator works so that you can calculate your pension amount.

NPS Calculator Formula

Maturity value (MV) = P x (1 + R/N) ^ NT

Where,

P = Invested Principal

R = Assumed rate of return or the expected rate of return

N = Number of times the growth rate compounds

Suppose Anamika, currently 30 years old, decides she will invest INR 3000 per month in the National Pension Scheme (NPS). Now, let us suppose her investment grew with a CAGR of 0.86% for the next 30 years (i.e until she is 60 years old), then:

• Her retirement corpus = INR 53,39,317
• Return she earned = INR 42,59,317
• Amount she invested = INR 10,80,000

Now, if she wants to do a lumpsum withdrawal of 60% of her investment, she will receive INR 32,03,590. The remaining INR 21,35,727 will be her annuity investment for a lifelong pension.

Based on her pension wealth investment, she will receive INR 12,458 per month as a pension for the time she is alive.

How to Use the NPS Calculator to Estimate the Pension Amount?

Investkraft’s NPS calculator is a very easy-to-use tool through which you can calculate how much monthly pension you will receive after you are 60 years old. Here are the simple steps you need to follow:

1. Enter a monthly investment amount
2. Choose a predictable interest rate
3. Select your age
4. Click on the “Invest Now” tab

What are the Benefits of the National Pension Scheme?

The National Pension Scheme comes with multiple benefits such as:

• The NPS (National Pension System) is a voluntary scheme that allows subscribers to contribute at any point in a financial year. Subscribers can also change the amount they want to set aside and save every year. Opening an account with any of the POPs (Point of Presence) or through eNPS is all that is required to get started.
• The scheme is highly flexible, allowing subscribers to choose their own investment options and pension fund, and watch their money grow over time. Additionally, it is portable, meaning that subscribers can operate their accounts from anywhere, even if they change their city of residence or employment.
• NPS is regulated by PFRDA (Pension Fund Regulatory and Development Authority) and adheres to transparent investment norms. The NPS Trust regularly monitors and reviews the performance of fund managers, ensuring that subscribers' investments are in safe hands.