Calculators / Retirement
Retirement
NPS
The low-cost retirement add-on. Project the corpus, the tax-free lump, and the pension the annuity actually buys.
At least 40% of the corpus must buy an annuity at exit.
About the NPS calculator
NPS is a low-cost retirement account with equity and debt options, an extra tax benefit, and a rule that part of the corpus must buy a pension at exit.
What is the extra tax benefit?
Up to 50,000 a year under section 80CCD(1B), over and above the usual 80C limit. For higher earners that deduction is the main draw.
What is the catch at retirement?
A portion of the corpus must buy an annuity, whose income is taxable and often modest. Factor that in rather than assuming the whole corpus is yours to spend freely.
NPS or an equity SIP for retirement?
NPS is cheaper and adds a tax break, but is less flexible and part-locked into an annuity. Many people use NPS for the tax slice and a separate SIP for freedom. The calculator shows the corpus and the pension split.