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NPS is a government-regulated retirement scheme where you contribute during your working life and the money is invested across equity, corporate bonds and government securities by professional fund managers. Unlike PPF or SSY, returns are market-linked and not guaranteed — the trade-off is a realistic shot at higher long-term growth, with equity exposure capped at 75% under the active choice.
This is the part that makes NPS different from every other retirement calculator, and it catches people out. At normal exit (60, or the applicable vesting period) you cannot simply withdraw the whole corpus. Under PFRDA's current NPS All Citizen Model rules, up to 80% can be taken as a lump sum, with a minimum of 20% required to buy an annuity from an insurer, subject to specific corpus-size provisions — a change from the previous 60%/40% split. You may voluntarily annuitise more than 20% if you want a bigger pension — the slider above lets you model that.
There is a tax wrinkle worth knowing: only 60% of the total corpus is tax-exempt as lump sum under the applicable NPS tax provision. If you take the full 80% permitted as lump sum, the additional 20% beyond the tax-exempt 60% may be taxable at your marginal rate. The annuitised portion follows its own tax treatment — the monthly pension it pays is taxable at your slab when received.
Contributing ₹10,000 a month from age 30 to 60 at an assumed 10% return, annuitising the minimum 20% at a 6% annuity rate:
You invest ₹36,00,000 over 30 years. The corpus grows to roughly ₹2.28 crore. Of that, up to ₹1.82 crore (80%) can be taken as a lump sum — but only ₹1.37 crore (60% of the corpus) is tax-exempt; the remaining ₹45.6 lakh of the lump sum may be taxable at your marginal rate. The remaining ₹45.6 lakh (20%) buys an annuity paying roughly ₹22,800 a month for life — taxable at your slab.
Annuity rates offered by Indian insurers have typically sat in the 5–7% range, and vary by the annuity option you choose (life only, with return of purchase price, joint life, and so on). Options that return the purchase price to your nominee pay a lower monthly amount. Since you only fix this rate at 60, treat it as an estimate and test a range.
PPF is government-backed and follows its statutory interest, contribution and withdrawal rules. NPS is market-linked and has different tax, withdrawal and annuitisation provisions. Which structure is relevant depends on the investor's objectives and circumstances.
Only in limited circumstances. Partial withdrawal of up to 25% of your own contributions is allowed after three years for specified reasons such as higher education, marriage, home purchase or serious illness. On full early exit, at least 80% must be annuitised — considerably stricter than at 60.
It is a common planning assumption for an equity-tilted NPS allocation over long horizons, but nothing is guaranteed — NPS returns depend on your asset mix and market performance. Test a lower figure such as 8% to see how sensitive your corpus is before relying on any single number.
