NPS example
NPS: ₹5,000 a month from age 30
Investing ₹5,000 a month in NPS from 30 to 60, at an assumed 12% a year, builds a corpus of about ₹1.76 crore. With 40% of it buying an annuity at 6%, that pays roughly ₹35,299 a month, plus a lump sum of ₹1.06 crore.
Result
₹1.76 Cr
Corpus at 60
- Total contributed
- ₹18 L
- Returns earned
- ₹1.58 Cr
- Lump sum (60%)
- ₹1.06 Cr
- Annuity (40%)
- ₹70.60 L
- Monthly pension at 6%
- ₹35,299
Starting at 35 instead leaves about ₹94.88 lakh, ₹81.61 lakh less, from the same monthly amount.
The pension is fixed in rupees, so inflation erodes it over retirement. Plan to cover rising costs from the lump sum or other savings.
₹5,000 a month from 30 at different returns
| Annual return | Corpus at 60 | Monthly pension |
|---|---|---|
| 8% | ₹75.01 L | ₹15,003 |
| 10% | ₹1.14 Cr | ₹22,793 |
| 12% | ₹1.76 Cr | ₹35,299 |
NPS returns depend on your equity and debt mix and on the fund manager; no return is guaranteed.
How the corpus builds at 12%
| Age | Contributed so far | Corpus |
|---|---|---|
| 35 | ₹3 L | ₹4.12 L |
| 40 | ₹6 L | ₹11.62 L |
| 45 | ₹9 L | ₹25.23 L |
| 50 | ₹12 L | ₹49.96 L |
| 55 | ₹15 L | ₹94.88 L |
| 60 | ₹18 L | ₹1.76 Cr |
How this is worked out
Each monthly contribution of ₹5,000 is invested and compounds until 60, 30 years away. Summing all 360 contributions with their growth at 12% a year gives the corpus of ₹1.76 crore.
At retirement, part of the corpus must buy an annuity, an insurance product that pays a monthly pension for life. This page uses the NPS calculator's default of 40% annuitised at 6% a year; the remainder can be withdrawn. PFRDA sets the exit rules, so check the current minimum annuity share and tax treatment when you plan withdrawals.
NPS has tax benefits on the way in: under the old regime, section 80CCD(1B) allows up to ₹50,000 a year on top of the 80C limit, and your employer's contribution under section 80CCD(2) is deductible under both regimes.
Frequently asked questions
Results are estimates for education and planning, not financial advice.
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