- Total investment
- Interest earned
- Total investment
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- Interest earned
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- Corpus at retirement
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- Lumpsum withdrawal
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- Monthly pension
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Figures are estimates for planning only, not investment or tax advice.
The National Pension System builds a retirement corpus from monthly contributions, then requires at least 40% of it to buy an annuity that pays a monthly pension for life. This calculator projects both numbers.
The two halves of the result
At 60 you can withdraw up to 60% of the corpus as a tax-free lumpsum. The remaining 40% (or more, if you choose) must buy an annuity, and the pension it produces depends on annuity rates at that time — currently around 6%. Both halves are shown separately.
The tax breaks
Contributions qualify under 80CCD(1) within the ₹1.5 lakh 80C limit, plus an extra ₹50,000 under 80CCD(1B) that no other instrument offers. Employer contributions up to 14% of basic are deductible under 80CCD(2), and that one survives in the new tax regime.
Frequently asked questions
What return should I assume?
9% to 11% for an equity-heavy allocation, 8% for a conservative one. NPS caps equity at 75% until age 50.
Is the pension taxable?
Yes, annuity income is taxed at your slab rate in the year you receive it. The 60% lumpsum is tax-free.
Can I exit before 60?
Yes, after three years, but then 80% of the corpus must go into an annuity — only 20% comes out as cash.
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How much do you need to retire? Work backwards from the monthly figure
The corpus number looks impossible until you see how it is built. Then it becomes a monthly instalment.