NPS Calculator: The National Pension System (NPS) is a popular investment and retirement plan in the country, especially for the middle class. It offers the assurance of a retirement corpus and a monthly pension during your golden years.

NPS, backed by the central government, was started with an aim to give social security to citizens post retirement. Managed by the Pension Fund Regulatory and Development Authority (PFRDA) under the PFRDA Act of 2013, NPS is a market-linked, defined contribution scheme designed to help you save systematically for retirement. It is simple, voluntary, portable, and flexible, making it an efficient way to boost retirement income and save on taxes.

NPS is available to all Indian citizens between the ages of 18 and 70, and can be adopted by corporates for their employees. The scheme offers various models to accommodate different user segments, ensuring a wide range of options for planning a financially secure retirement.

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Until what age can you invest in NPS?

You can invest in the National Pension System (NPS) until you are 70 years old. To be eligible, you must be an Indian citizen, including residents, non-residents, or Overseas Citizens of India. Additionally, you can invest if you are employed by a corporate that has adopted the NPS scheme.

Understanding NPS investment for a monthly pension

You can invest in the National Pension System (NPS) until the age of 70. To illustrate how to ensure a monthly pension of Rs 50,000, let’s consider an example:

Assume a person starts investing in NPS at age 50 and continues until age 65, which means they invest for 15 years. According to NPS rules, at retirement, you can withdraw 60% of the corpus as a lump sum and use the remaining 40% to purchase an annuity that provides a monthly pension.

Example Details:

Starting Age for Investment: 50 years
Annual Return on Investment: 12%
Desired Monthly Pension: Rs 50,000

Investment Breakdown:

Monthly Investment Required: Rs 50,000
Total Investment Over 15 Years: Rs 90,00,000
Total Corpus at Age 65: Rs 2,52,28,800
Monthly Pension (from 40% of Corpus): Rs 50,458

In this scenario, investing Rs 50,000 per month for 15 years at a 12% annual return would generate a corpus of approximately Rs 2,52,28,800 by the time the person reaches 65. With 40% of this corpus used to purchase an annuity, the individual would receive a monthly pension of Rs 50,458, exceeding the target of Rs 50,000.