National Pension System (NPS) is a voluntary retirement savings scheme where subscribers can make a defined contribution to secure their future through pensions.
When leaving NPS, subscribers may purchase a life annuity from a life insurance company and withdraw a part as a lump sum. The NPS is open to Indian citizens between the ages of 18 and 70.
NPS Prosperity Planner
To invest in NPS, an applicant needs a Permanent Retirement Account Number (PRAN ), which can easily be obtained from any bank branch approved by PFRDA. Once you start investing, you should know how much to contribute to generate enough corpus to be self-sufficient when you retire. This amount can be calculated using a personalised planning calculator run by the NPS called the NPS Prosperity Planner.
If your contributions are not up to par, the calculator will suggest an increase in your contributions. Further, it helps subscribers calculate the monthly pension amount they can expect at maturity using historical data from the PRAN account.
It is a user-friendly tool that will help you know how ready you are for retirement. After adjusting for inflation rates, you will be shown what pension you need compared to what you will receive. It also tells you how to address this gap.
How To Use The Calculator
Central or state government employees contribute to their pension along with matching contributions from their employers. If you don’t fall into these categories, you can select the individual investor option in the calculator. The calculator is available at https://npp.proteantech.in/
Enter your date of birth, the date you joined or will join the NPS, and your NPS balance.
You will be able to see your contributions so far, your average annual contribution, and your retirement date.
Next, you can enter the amount of your planned increase in contributions and the percentage of your corpus to be received as pension payments monthly.
The calculator then asks for your current living expenses and the inflation rate you anticipate in the future. These inputs determine how much your contributions should be increased to meet the living expenses in your retirement life. Moreover, the calculator allows you to increase the
percentage of your corpus that will be paid out as monthly pension payments, and your contributions will be adjusted accordingly.
NPS now provides an easy way to increase your contribution through eNPS, an online platform. Net banking or your debit or credit card can be used on this platform. Individuals can also use this platform to open their NPS account by providing their Aadhaar, PAN, and KYC details as recorded with the bank.