## NPS Calculator – How is NPS calculated ?

NPS Calculator: Know how much pension you will receive at retirement

National Pension System is a government-sponsored pension scheme. It is a contribution-based scheme where the amount of pension to be received by you in the future depends on the amount of corpus accumulated at the time of the scheme’s maturity.

The NPS calculator will show you the amount of corpus that will be accumulated by you at the time of maturity and the approximate amount of monthly pension to be received by you.

The amount of corpus accumulated by the time you retire will depend on your investment amount and returns generated.

Who can use the NPS calculator?
NPS calculator can be used by anyone who is eligible to invest in the scheme. As per the NPS rules, any Indian citizen between the ages of 18 years and 60 years can invest in the scheme. The person will require complying with know-your-customer (KYC) norms to start investing in the scheme.

How to use this calculator
To know how much corpus will be accumulated by you, the calculator will require the following details:
a) Your current age and the age you wish to retire
b) Amount that will be invested by you every month
c) Returns that you expect to earn from your NPS investment
d) Annuity period, i.e., number of years over which you wish to receive the monthly pension in the post-retirement years. You are required to mention this number in years.
e) The percentage of pension wealth invested in the annuity plan means the percent of accumulated corpus you will use to buy a pension plan. This cannot be below 40 percent if you withdraw at 60 years or more. If you withdraw before 60 years, it cannot be below 80 percent.
f) Expected rate of interest on the annuity investment is the returns that you expect to earn from your annuity (pension) during the post-retirement period.

How the calculator works
With the inputs given by you, you will get the corpus that will be accumulated by you at the time of your retirement. The corpus is calculated by using the principle of the power of compounding.

What the calculator shows
The NPS calculator will show you the details of your investment. It will show you the amount invested during the accumulation phase of the scheme, the interest earned by you, and the total amount of corpus generated at the time of maturity.

The calculator also shows the break-up of details of the amount which is re-invested to receive monthly pension and lump sum amount withdrawn by you. Based on the expected returns from the annuity, it also shows the amount of monthly pension that you will receive.

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