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How To Use An NPS Calculator

What is an NPS Calculator?

The NPS calculator enables investors to estimate their wealth gains, total investment maturity amount, and monthly pension payment. This sum is determined by the investment period and NPS contribution.

The NPS calculator aids investors in estimating the amount of investment necessary to meet their financial objectives. The ability to compound to increase wealth makes NPS a desirable retirement wealth plan.

Investors must input their monthly or annual investment amount, current age (more than 18), and withdrawal percentage on retirement.

Who Can Use the NPS Calculator?

The straightforward and user-friendly NPS calculator can be used by an investor who wants to invest in NPS and wants to get an idea of the wealth that they will gain for a specific investment amount.

The national pension scheme is open to all Indian citizens who are at least 18 years old but aged under 60 years. All NPS candidates must adhere to the Know Your Customer (KYC) guidelines and provide all necessary documentation, like proof of identification, address proof, and bank account information.

Due to compounding, the investor will get a greater retirement benefit when he invests more in the scheme. The larger accumulated wealth owing to the power of compounding makes this scheme attractive to investors.

How to Use the NPS Calculator?

To find how much your retirement pension will be each month, enter the information below.

  • Depending on whether you wish to invest monthly or yearly, choose the “investment type.”
  • Enter the sum that you want to invest each month or annually.
  • Enter your current age, which should be more than or equal to 18 years. Given that the retirement age is 60 years, your current age will help in establishing the investment tenure.
  • The calculator displays calculations based on NPS with an asset allocation between government bonds (20%), corporate bonds (30%), and equities (50%).
  • Give the “Withdrawal % on Retirement”. This represents the percentage of pension wealth put into the annuity plan. You will utilize this percentage of the total corpus to purchase a pension plan.
  • The investment in the annuity plan cannot be less than 40%, and the withdrawal cannot be more than 60%. The investment in the annuity plan cannot be lower than 80% if you withdraw before turning 60.
  • The calculator will offer an estimate of the following based on the information entered above:
  • Accumulated wealth
  • Withdrawal on retirement
  • Total corpus created
  • Monthly pension

Let us look at an example to better understand the NPS calculator.

Rahul, a 25-year-old, intends to invest in NPS for his retirement and wants to use the NPS calculator.

He can invest INR 5,000 per month. He takes an aggressive investment strategy (which can generate a 14% return). His investment horizon is 35 years (retirement age 60 – current age).

The tool based on the inputs given above will throw out the following results.

Principal invested = INR 21 lakhs

Gains made on the principal invested = INR 5.41 crore

Total maturity value = INR 5.62 crore (principal invested of INR 21 lakhs + gains INR 5.41 crore)

Annuity at 40%, amounting to INR 2,25 crore.

This means he has withdrawn 60% of the maturity value, which will amount to INR 3.37 crore.

Money invested in annuity = INR 2.25 crore

monthly pension = INR 1.24 lakhs

How Does the NPS Work and How Does it Benefit You?

Let’s break down the investment lifetime of an investor into two parts, namely the accumulation stage and the retirement stage, for a better understanding.

Accumulation Stage

Investing in the NPS system allows an investor to amass money and develop a corpus during the accumulation stage. The scheme then invests in various assets that generate returns and wealth appreciation.

A pension fund is created by combining the invested funds. Professional fund managers manage and invest this pension fund in broad portfolios that include stocks, treasury bills, government bonds, and debt securities. Over time, the portfolios expand and build up, providing the investors with a corpus on which to rely.

The PFRDA regulates the entire portfolio management process, and the fund managers must adhere to the approved investment guidelines.

An investor in NPS can invest in Active choice or Auto choice. The distribution of funds in auto choice is determined by a formula depending on the investor’s age. Although the investor can choose the allocation through active choice, the equity allocation is limited in this case.

Retirement Stage

The investor wishes to guarantee his post-retirement income during the retirement stage. NPS offers a source of income. Here, the corpus amassed during the accumulation period determines the magnitude of the retirement benefit.

At retirement, 60% of the total corpus can be withdrawn, either at once or in installments. The acquisition of annuity plans will require the spending of the remaining 40% of the corpus.

Is NPS a Good Investment Option?

NPS is an investing strategy that meets the need for regular income after your retirement. An investor’s financial objective is to build wealth and a corpus fund that can produce a monthly income and guarantee this income after retirement.

A portion of the fund is invested by NPS in stocks, which are exposed to market volatility, risks, and rewards. The quantum of equity exposure depends on multiple factors. A potential investor can consider various investment options in addition to SIP, equity-oriented mutual funds, debt-oriented mutual funds, and ELSS if his financial objective is to build wealth. These investing alternatives have the added benefit of higher returns but are still subject to market risk and fluctuations.

Debt-oriented funds or a balanced fund can explore these choices for an investor who is young and prepared to be exposed to the equity market to achieve a bonus return compared to NPS.

It is crucial to remember that NPS is a retirement investment plan and that tax advantages and a balanced portfolio approach are the main factors that should entice investors to join NPS. NPS is a long-term commitment, with few choices for early withdrawal. Its benefits are only made available upon retirement.

Any option can be picked, depending on how much market risk and volatility an investor wants to accept. However, an investor must consider his expenses, income, and other financial obligations before making a choice.

Other Investment Alternatives

To expand your portfolio, it is always a good idea to consider various investment alternatives. Thus, your risk is reduced, and your rewards are maximized. You can make investments in safer options such as fixed deposits and government bonds. Consider investing in stocks if you have a high-risk tolerance. One of the rapidly growing investment opportunities made possible by technology is P2P lending. In the Fractional Matchmaking Peer-to-Peer Plan from LenDenClub offers annual returns of up to 10–12%* p.a. on your investment.

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.



The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or investment returns. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any investment decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ investment amounts.


*P2P investment is subject to risks. And investment decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of returns received by investors

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