Are you using a National Pension Scheme calculator for the first time? Here’s all you need to know about it.

What is an NPS calculator?

The National Pension Scheme calculator is a tool that lets you figure out how much money you’ll get as a pension. This will give you an estimate of how much you should invest each month in order to retire with a suitable corpus. The amount of money you’ll have when you retire is determined by the amount you invest and the returns you earn.

Simply put, the more money invested, the larger the cumulative sum will be, and the greater the accumulated pension riches will be. The NPS calculator allows you to assess the predicted retirement corpus based on your risk appetite by allowing you to choose between debt and equity. As a result, the NPS calculator is a useful tool for making an informed NPS investment.

Who can use the NPS calculator?

The NPS calculator can be used by all those eligible to invest in the NPS scheme. Indian people between the ages of 18 and 60 are eligible to invest in the scheme, according to the NPS rules. Individuals must, however, submit the necessary Know Your Customer (KYC) documents before investing in the plan.

NPS calculator features

The National Pension Scheme Calculator has a number of useful features.

  • This calculator can be used online in a very simple manner.
  • The calculator can assist you in calculating the exact amount of your pension.
  • The calculator also indicates how much you invested during the accumulation phase, how much interest you earned, and how much money you’ll have at maturity.
  • The National Pension Calculator is available to anybody who is eligible to invest in the National Pension Scheme.

How to use the NPS calculator?

Here’s how to use the NPS calculator step by step:

To begin, you must enter the following information in the following order:

Date of Birth (DOB) — After entering your date of birth, the calculator will calculate the number of years you will be able to contribute to the plan.

Investment Amount – This is the amount you want to put in each month.

Return on Investment (ROI) Expected – Determine your intended return on investment.

% Of Annuity to be Purchased — This is the percentage of the corpus, i.e., pension wealth, that you want to reinvest to buy an annuity when it matures. An annuity in the NPS is a monthly pension paid by the Annuity Service Provider to the NPS subscriber (ASP).

Note that the percentage of the corpus that must be reinvested in an annuity cannot be less than 40%. However, if you decide to leave the scheme early, before reaching the age of 60, you must invest at least 80% of your pension savings in an annuity.

Expected Annuity Rate – Enter the expected annuity rate, which is the amount you anticipate receiving from your pension.

Once you’ve provided all of your information, the NPS calculator will begin calculating the lump payment and pension amount you’ll receive at maturity.

The calculator creates a summary of your pension account at retirement. It includes the total amount you would have contributed throughout the years and the corpus generated at maturity. In addition, the NPS calculator calculates your estimated monthly pension based on the predicted returns on the Annuity.

Over to you

Looking to build your retirement corpus by investing in NPS? Download Tata Capital’s Moneyfy app to start your investment journey and enjoy goal-based investing with ease.

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