NPS Calculator
NPS Calculator helps you check how much corpus you can build with National Pension System. It also helps you to determine the amount of monthly/annual pension that you might receive post retirement.
Disclaimer
The above calculation and illustration of figures are indicative only and not on actual basis.
Break up of Lump sum value and Amount to be invested in Annuity
Disclaimer
The above calculation and illustration of figures are indicative only and not on actual basis.
The National Pension System or NPS, introduced by the Ministry of Finance (Government of India), is a measure to ensure a degree of financial stability for Indian citizens after they have retired. It was previously known as the National Pension Scheme.
An individual invests in NPS during his working years, at the time of retirement, the accumulated amount can be withdrawn up to 60% and the rest has to be invested into an annuity scheme to get a regular pension.
What is a NPS Calculator?
An NPS calculator is a tool that helps you estimate the amount of money you will accumulate in your National Pension System (NPS) account over time. It takes into account factors such as your age, your monthly contributions, the expected rate of return on your investment, and the amount of time you will remain invested.
How does the NPS Calculator Work?
The NPS calculator uses a formula to estimate the future value of your NPS account. The formula takes into account the following factors:
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- Your age: This is important because it determines how long you have until you retire and start drawing on your NPS account.
- Your monthly contributions: This is the amount of money you contribute to your NPS account each month.
- The expected rate of return on your investment: This is the rate of return that you expect to earn on your NPS investment.
- The amount of time you will remain invested: This is the number of years that you will continue to contribute to your NPS account before you retire.
How to use the NPS calculator:
Using the NPS calculator is simple. Just enter your age, your monthly contributions, the expected rate of return on your investment, and the amount of time you will remain invested. The calculator will then estimate the amount of money you will accumulate in your NPS account over time.
Who can use the NPS Calculator?
Anyone who is considering investing in the NPS can use the NPS calculator. This includes:
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- Salaried employees: Salaried employees can contribute to the NPS through their employer’s payroll system.
- Self-employed individuals: Self-employed individuals can open an NPS account and make voluntary contributions.
- Non-resident Indians (NRIs): NRIs can also open an NPS account and make voluntary contributions.
Benefits of using the National Pension Scheme Calculator
There are many benefits to using the NPS calculator, including:
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- It helps you plan for your retirement: By using the NPS calculator, you can get an estimate of how much money you will need to save for retirement.
- It helps you make informed investment decisions: The NPS calculator can help you compare different investment options and choose the one that is right for you.
- It is free and easy to use: The NPS calculator is a free tool that is easy to use.
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FAQs on National Pension Scheme Calculator
Q: What is the current interest rate of NPS?
A: The current interest rate for NPS is not fixed. It varies depending on the chosen asset class (Equity, Debt, and Government Securities) within your NPS account. The estimated returns are 12% for Equity, 8% for Debt, and 7% for Government Securities. Remember, these are estimates, and actual returns may vary.
Q: Does the NPS calculator assist in calculating the tax amount on withdrawals?
A: No, the NPS calculator does not calculate the tax amount on withdrawals. However, it provides the estimated corpus and pension amount, which can help you understand your potential tax liability based on applicable tax laws. Please consult a tax advisor for personalized guidance.
Q: Is NPS calculated monthly or yearly?
A: Your NPS contributions are typically made monthly, but the interest accrual and corpus growth are calculated annually. The NPS calculator considers this annual compounding while estimating your future corpus and pension.
Q: Is the NPS calculator applicable for all types of NPS accounts?
A: Yes, the NPS calculator is applicable for all types of NPS accounts, including Tier I (individual accounts) and Tier II (corporate accounts). The calculation considers the specific contribution limits and investment options applicable to each tier.
Q: Can I use the NPS calculator to plan for my retirement?
A: Absolutely! The NPS calculator is a valuable tool for retirement planning. It helps you estimate the future value of your NPS corpus based on your current contributions and expected investment returns. This information can help you assess if you’re on track to meet your desired retirement income.
Q: What information do I need to use the NPS calculator?
A: To use the NPS calculator effectively, you’ll need:
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- Your current age: This helps determine your investment horizon.
- Your desired monthly contribution: This is the amount you plan to contribute regularly.
- Expected rate of return: Choose the estimated return based on your chosen asset allocation (Equity, Debt, etc.).
- Investment period: This is the number of years you plan to contribute before retirement.
- Desired retirement age: This helps determine the duration of your pension payout.
Q: What is the minimum contribution for Tier I and Tier II NPS subscribers?
A: The minimum contribution for Tier I NPS is ₹6,000 per year, while there is no minimum for Tier II accounts. However, Tier II contributions cannot exceed your employer’s contribution limit.
Q: What is the maximum contribution for Tier I and Tier II NPS subscribers?
A: The maximum contribution for Tier I NPS is 10% of your basic salary (including Dearness Allowance) or ₹2 lakh per year, whichever is lower. Tier II contributions are subject to your employer’s specified limit.
Q: Does the pension maturity value vary between tier-1 and tier-2 cities?
A: No, the pension maturity value depends solely on your total contributions, investment returns, and chosen annuity options, regardless of your city. Location does not influence the NPS calculations.
Q: How do I get a ₹10,000 NPS pension per month after retirement?
A: Use the NPS calculator to input your desired monthly pension and retirement age. Then, adjust your monthly contribution amount until the calculator displays a corpus value that, when converted to a pension using the annuity option you choose, provides ₹10,000 per month. Remember, this is an estimate, and actual returns may differ.
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Returns under NPS are subject to market risk based on the status of the financial market. Current returns of the company does not guarantee same returns in the future. Kindly consult your CA/Financial Advisor to know more about the market and returns.