Plan your monthly pension amount for your retirement years
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What is NPS Calculator?
It is an excellent tool to get an idea of how much you must invest to achieve your financial goal. The more the accumulated amount, the higher will be the eventual benefit. The money you invest in NPS grows with a compounding effect.
Note – The calculator only illustrates an approximate figure of the monthly pension and the lump sum you get, and it does not assure the calculated figure. This is because the amount you invest in NPS is invested in the money-market. The actual returns may vary based on the percentage of allocation of funds in equities and other funds, as well as the performance of the underlying asset.
Who Can Use the NPS Calculator?
Eligibility criteria to join NPS
- You must be an Indian citizen (both resident and non-residents are eligible to invest in NPS)
- You must be aged between 18-65 years as on the date of submitting your application
- You must comply with the KYC norms as mentioned in the registration form
- You must have an active savings bank account
Benefits of Using the National Pension Scheme Calculator?
- NPS calculator gives you quick results. You can save your time from doing manual calculations.
- You get a clear idea of how much you need to invest to achieve the desired pension amount. Thus, it allows for efficient financial planning.
- The calculator is easy to use, and it is available online for free. You can use it at any time as you want.
- The calculator gives you a clear picture of the amount you invest throughout the tenure (accumulation phase), the interest earned, and the total accumulated funds at maturity.
How Does the Pension Fund Calculator Work?
The working of the NPS calculator is simple. Most calculators would require you to enter the following details:
Investment type- How frequently you want to contribute towards your NPS account if you wish to invest monthly or yearly
The investment amount- How much you want to contribute to your NPS account
Investor’s age- You must enter your current age, which should be at least 18 years or more. This helps fund managers allocate the funds
Withdrawal amount- The percentage of the accumulated funds you wish to withdraw from the NPS account when you attain the retirement age
Based on the above details you provide; the calculator calculates the following:
- Total amount invested
- The investment tenure
- The monthly pension amount you receive post-retirement
How to Use the National Pension Scheme Calculator?
You wish to know how much to contribute to your NPS account to get the desired funds for achieving a goal
- Choose 'for investment amount' option
- Enter the amount you expect to earn from your investment to achieve your financial goal
- Enter your current age
- Click the 'calculate' button
Based on the values you enter in the above fields, the NPS calculator will tell you the amount you must contribute towards your NPS account every month/year to get the desired funds at retirement.
You wish to invest a fixed sum every month/year and know the final amount you will get at the end of investment tenure.
- Choose the 'for retirement goal' option
- Enter the amount you want to contribute towards your NPS account every month/year
- Enter your current age
- Click on the calculate button
The NPS calculator will immediately showcase the final corpus value that you can expect to get when you retire.
What are the minimum and maximum contribution amount towards the NPS account?
For the NPS Tier – II account, the minimum contribution is Rs. 250 while opening the account. But, once you open the account, there is no minimum balance required to maintain the NPS account. Also, there are no restrictions on the maximum contributions you can make.
Invest in NPS for a secure retirement
NPS Calculator FAQs (Frequently Asked Questions)
What is the Current Interest Rate of NPS?
NPS helps individuals to invest periodically towards building their retirement corpus through their working life. The savings made are pooled in to a pension fund which are invested by pension fund managers as per the approved investment guidelines in to the diversified portfolios comprising of Government Bonds, Corporate Debentures and Shares. These contributions would grow and accumulate over the years, depending on the returns earned on the investment made.
On maturity the subscriber is required to use part of the accumulated pension wealth to purchase a life annuity from a PFRDA empaneled Life Insurance Company. Rate of annuity realized by the subscriber will be dependent on interest scenario at the time of purchase of annuity.
Is it Possible to Make Early Withdrawal from the Pension Plan?
There are various types of Pension plans – EPS, NPS, Pension plans offered by Life Insurance companies and Mutual Fund companies etc. So early withdrawal rules differs for every type of pension plan.
Under NPS, early withdrawal is allowed in two ways. Firstly in case of certain emergencies subscriber is allowed to withdraw 25% of his contribution as a partial withdrawal. Subscriber can make maximum three such withdrawals in his entire lifetime. Secondly subscriber is allowed to take pre mature exit from NPS which is allowed 10 years after opening the account. But in case of pre mature exit, he needs to invest minimum 80% of pension wealth to buy annuity and only 20% maximum he can withdraw as lumpsum.
What are the Tax Benefits Under NPS?
The contribution made towards the National Pension Scheme (NPS) is eligible for a tax deduction up to Rs. 1.5 Lakh under Section 80C and 80CCD(1). Furthermore, under Section 80CCD(1B), individuals can claim a tax deduction of Rs. 50,000.
What is Pension Plan?
A pension plan is a retirement plan that allows an individual to accumulate a corpus for life after retirement. An individual can choose from a variety of pension plans based on his/her requirements.
What is Annuity?
An annuity plan provides a policyholder with steady revenue once he/she retires. With the help of an annuity policy, an individual can plan his/her finances for life after retirement. The pay-out can be done on monthly, quarterly, six-monthly, or annual frequencies.
DisclaimerThe information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.