The subscribers of the National Pension System (NPS) can now effortlessly calculate how much to contribute monthly to achieve the required pension corpus as the NPS Trust has revamped its website by adding new features.

The NPS calculator has proven a valuable tool for retirement planning. Scores of people use the NPS System for pension benefits after retirement.

The NPS members can withdraw up to 60 per cent of the accumulated corpus in lumpsum after 60 and invest the remaining or the entire amount in annuities. 

However, while planning for retirement, one should know how much to contribute monthly or frequencies to reach the corpus required.

Now, with the upgraded NPS website, it will be easy for the subscribers to calculate and build a strong retirement corpus by determining the monthly contributions and the frequency with the help of the calculator. 

Let us see how to use it. 

To calculate the retirement corpus, the individual must fill in the date of birth and the monthly contribution in the calculator. Then, they must select their contributions’ duration—they can choose up to 60 years or till 75 years. After that, they can select the percentage of return on the investment, which ranges from 5 per cent to 15 per cent on the scale given in the calculator.

The individual must also select two other options: the withdrawal percentage of the annuity from the corpus, which could be a minimum of 40 per cent or 100 per cent, and the expected return on the annuity from 4 per cent to 10 per cent. 

For example, suppose a person aged 30 saves Rs 5,000 monthly until 60 years. In that case, the expected return on investment is, say, 10 per cent, with 60 per cent of the corpus is expected to be withdrawn at 60 years, and the remaining 40 per cent investment in an annuity plan will likely generate a 6 per cent return. 

Contribution Till The Age Of 60 

As per the calculator, the total contribution will be Rs 18 lakh if the person invests in the NPS account for the next 30 years. At a 10 per cent return on the total contribution, the corpus will become Rs 1,13,96,627, or gains of Rs 95,96,627.  

Of the total corpus, Rs 68,37,976 (or 60 per cent of the total) can be withdrawn in lumpsum on retirement at 60, and the remaining Rs 45,58,651 (or 40 per cent) can be used for annuity. 

Monthly Pension: If the subscriber wants to take annuities for the entire amount, the monthly pension amount will be Rs 56,983. If the annuity conversion is for 40 per cent of the corpus, the monthly pension would be Rs 22,793.

Contribution Till The Age Of 75 

Considering the same amount of monthly contribution and return as in the above example, the total investment will be Rs 27,00,000, and the total corpus will grow to Rs 5,28,49,280 or total gains of Rs 5,01,49,280.  

Monthly Pension: If the contribution was made till 75 years, and the full amount is invested in the annuity, then the monthly pension will be Rs 2,64,246. If the person invests a 40 per cent annuity, the monthly pension will be Rs 1,05,699.  

The calculator clearly shows how much to contribute and how many years it takes to reach the required funds. Though the actual return may differ depending on the market conditions, the calculator gives the individual an idea of what to expect.  

The government initially launched the NPS scheme in 2004 for its employees; however, in 2009, it opened the scheme for all citizens, including self-employed and unorganised sectors. As per the NPS website, the asset under management (AUM) in the NPS has grown from Rs 48,103 crore in 2013-14 to Rs 9,40,992 crore in 2023-24, as of June 30, 2023.