Mr. B is employed as an executive and his present age
is 50 years. His present saving is worth Rs. 100,000. It
is invested in a scheme @ 10% compounded annually.
He is due to retire at the age of 60 years. He wishes to
receive Rs. 80,000/- per annum for 10 years after his
retirement. The applicable interest rate then will be 9%.
How much amount shall he save and deposit annually
at the end of current year and next 9 years i.e up to his
retirement to achieve his aim provided he can earn
interest of 8% on his annual savings up to his
retirement on annual compounding basis.
Answers
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National Pension Scheme
CALCULATOR
Calculate the amount of pension wealth you will accumulate on retirement
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NPS Calculator: Know how much pension you will receive at retirement
National Pension System (NPS) is a government sponsored pension scheme. It is a contribution based scheme where the amount of pension to be received by you in the future depends on the amount of corpus accumulated at the time of scheme's maturity.
The NPS calculator will show you the amount of corpus that will be accumulated by you at the time of maturity and approximate amount of monthly pension to be received by you.
The amount of corpus accumulated by the time you retire will depend on your investment amount and returns generated.
Who can use NPS calculator?
NPS calculator can be used by anyone who is eligible to invest in the scheme. As per the NPS rules, any Indian citizen between the ages of 18 years and 60 years can invest in the scheme. The person will require complying with know-your-customer (KYC) norms to start the investing in the scheme.
How to use this calculator
To know how much corpus will be accumulated by you, the calculator will require the following details:
a) Your current age and the age you wish to retire
b) Amount that will be invested by you every month
c) Returns that you expect to earn from your NPS investment
d) Annuity period, i.e., number of years over which you wish to receive the monthly pension in the post retirement years. You are required to mention this number in years.
e) The percentage of pension wealth invested in the annuity plan means the percent of accumulated corpus you will use to buy a pension plan. This cannot be below 40 percent if you withdraw at 60 years or more. If you withdraw before 60 years, it cannot be below 80 percent.
f) Expected rate of interest on the annuity investment is the returns that you expect to earn from your annuity (pension) during the post-retirement period.
How the calculator works
With the inputs given by you, you will get the corpus that will be accumulated by you at the time of your retirement. The corpus is calculated by using the principle of power of compounding.
What the calculator shows
The NPS calculator will show you the details of your investment. It will show you the amount invested by you during the accumulation phase of the scheme, interest earned by you, and the total amount of corpus generated at the time of maturity.
The calculator also shows the break-up of details of the amount which is re-invested to receive monthly pension and lump sum amount withdrawn by you. Based on the expected returns from the annuity, it also shows the amount of monthly pension that you will receive.