NPS Calculator

NPS can be a great investment option for those working in private employment or unorganized sectors. But one has to make contributions consistently for years to build a corpus. Calculating future returns and deciding how much to contribute yearly can be challenging. If you plan to invest in the NPS, an NPS calculator can assist you in performing all the calculations. 

What is the NPS? 

The National Pension System (NPS) is a retirement savings scheme introduced by the government. It is a voluntary scheme designed to provide a fixed monthly pension to Indian residents after their retirement.    

One has to contribute regularly to an NPS fund to create a corpus. After reaching the age of 60, the investor becomes eligible to withdraw a portion of their investment fund and commence receiving a monthly pension. The best part about the NPS is that it's open to any resident between 18 and 60. 

What is an NPS Calculator? 

An NPS scheme calculator is an online tool designed to perform mathematical calculations related to your NPS score calculation. Performing these calculations manually is a time-consuming process.  This tool uses the NPS score formula to calculate the total contribution, interest received until retirement, minimum annuity investment, and maturity amount.   

How Does an NPS Calculator Work? 

The user has to enter the monthly NPS investment, the expected return % per annum, and their age into the NPS calculator online. The tool uses this information to calculate all the figures related to the NPS investment. It provides these answers within a few seconds using the NPS score formula. This tool is free to use and is available easily online. 

How Can an NPS Calculator Help You? 

With a pension plan calculator, individuals can determine the corpus fund they will accumulate, considering their current contributions, rate of return, and age. It can also find the minimum annuity requirement and the amount of interest earned on one's contributions. The process of NPS score calculation is faster because it's fully automated. 

It is possible to calculate this information manually, but it's a time-consuming process.  

An NPS scheme calculator makes it effortless. You can find calculators that help you compute other pensions, such as family pension calculators. NPS calculators can make the following calculations quickly and accurately. 

Corpus Fund Maturity Amount 

Using this calculator, one can calculate the amount of corpus fund they will have when they turn 60. The corpus fund amount is calculated based on the investor's age, the current NPS interest rate, and their expected yearly contribution. 

Minimum Investment in Annuities 

The minimum amount from a corpus that needs to be invested is 40 per cent. In case one wants to surrender before reaching the age of 60, they will have to use 80 per cent of the corpus to get the annuity scheme.Total Investment and Interest Earned 

An online pension calculator calculates the total amount an investor would contribute till retirement based on their current age and yearly contribution. It can also estimate the interest the investor would earn on that contribution by then. One has to enter the expected rate of return, the contribution, and other details in the NPS scheme calculator. 

Pension  

Using the NPS calculator formula, one can compute how much pension they will receive after retirement. This is calculated based on the expected annuity percentage, rate of return, and corpus fund.  

The formula for Calculating Pension Amounts 

You can calculate your future corpus fund amount using the NPS calculation formula. The formula is based on the calculation of compound interest that you may have used before. It can be understood better with an NPS calculation example. 

Here's the basic formula that pension plan calculators use. 

A = P(1+r/n)^nt 

A = Amount of corpus fund at the time the investor turns 60 

P= Amount invested every year in the fund 

r= Expected rate of interest p.a. 

n= Number of times the interest compounds  

t= Duration 

Let's understand the NPS calculator formula with an NPS calculation example. 

Suppose you start to invest ₹ 5,000 every month in the NPS at the age of 25. You have continued to invest the same amount every month for 35 years. The rate of return is 10% p.a. We can put these values in the NPS calculation formula to get the amount of corpus fund at the age of 60. Alternatively, you can put these figures in an NPS amount calculator. Here are the results given by the pension calculator.   

Principal amount invested = ₹ 15,00,000 

Interest earned= ₹ 51,34,167 

Maturity Amount= ₹ 66,34,167 

Annuity investment that cannot be withdrawn= ₹ 26,53,667 

How To Use The NPS Calculator? 

Instead of using the NPS calculation formula, one can use an online pension calculator for faster and more accurate answers. Some of the best NPS calculators are available online. Here's how you can use the one created by Shriram Finance. 

Step 1: Open the pension calculator on the website of Shriram Finance. 

Step 2: Enter your estimated monthly contribution to the fund in the relevant blank field of the NPS amount calculator.  

Step 3: Select the yearly expected NPS interest rate 

Step 4: Enter your age. 

Step 5: Click 'Submit'. Within seconds, the pension plan calculator will reveal the maturity amount, the minimum annuity, the total contribution, and the interest earned on it. 

Advantages of Using the National Pension Scheme Calculator   

The following are the key benefits of using the NPS Calculator: 

Quick Results 

Once you enter the relevant data, the National Pension Scheme calculator will provide results within seconds.   

Accurate Answers 

All you have to do is enter all the required data in the correct fields, and the NPS calculator will provide accurate results, making it a highly efficient tool to plan your retirement.     

Helps in Financial Planning   

You can try out different contribution amounts and discover the corresponding maturity amounts with an NPS amount calculator.  This can help you find a suitable contribution that will help you achieve your retirement corpus.   

Easily Available  

It is easy to find the best NPS calculator by searching the internet. They are readily available on various websites. You can also find other calculators with ease, such as the NPS trust calculator.     

Free of Cost 

The national pension scheme calculator designed by Shriram Finance is free of cost. Our NPS pension calculator is also easy to use, so you can be assured of a hassle-free experience. 

Conclusion 

NPS is among the most popular investment options to build a corpus for retirement. It is important to use an NPS calculator to determine the monthly amount you can expect upon retirement. This free and easy-to-use tool can help you identify how much you need to save in order to achieve your savings goals. Just enter a few details as requested and get accurate results within seconds with the Shriram Finance NPS Calculator.