National Pension System Calculator
def calculate_nps_amount(principal_sum, rate_of_interest, tenure): n = 1 final_value = principal_sum * (1 + rate_of_interest/n) ** (n*tenure) return final_value principal_sum = 1000000 # in INR rate_of_interest = 0.08 # 8% tenure = 20 # in years nps_amount = calculate_nps_amount(principal_sum, rate_of_interest, tenure) print("NPS amount after", tenure, "years is", nps_amount)
National pension system (NPS) is a government-sponsored retirement scheme that allows you to invest a part of your income in various funds and get a monthly pension after retirement. NPS is a flexible and low-cost option that can help you build a corpus for your golden years. But how do you know how much pension you will get from NPS? How do you plan your investments and withdrawals? This is where NPS calculator comes in handy.
NPS calculator is an online tool that helps you estimate the maturity amount and monthly pension you can expect from NPS based on your monthly contribution, age, expected return, annuity purchase, and annuity rate. You can use NPS calculator to compare different scenarios and choose the best option for your retirement goals.
How to use NPS calculator?
Using NPS calculator is simple and easy. All you need to do is enter the following details:
- Monthly investment: This is the amount you want to contribute to NPS every month. The minimum monthly contribution for NPS is Rs 500 for Tier I account and Rs 250 for Tier II account.
- Your age: This is your current age. The minimum age to join NPS is 18 years and the maximum age is 60 years.
- Expected return on investment: This is the annual rate of return you expect from your NPS investments. You can choose between different funds such as equity, corporate debt, government securities, or a mix of them depending on your risk appetite and investment horizon.
- Percentage of annuity purchase: This is the percentage of your accumulated corpus that you want to use to buy an annuity plan at the time of retirement. An annuity plan is a contract with an insurance company that pays you a fixed monthly income for life or a certain period. The minimum percentage of annuity purchase for NPS is 40% for normal exit and 80% for premature exit.
- Expected annuity rate: This is the annual rate of return you expect from your annuity plan. You can choose from different types of annuities such as life annuity, joint life annuity, increasing annuity, deferred annuity, etc.
Once you enter these details, the NPS calculator will show you the following results:
- Invested amount: This is the total amount you have invested in NPS over the years.
- Pension wealth: This is the total amount you have accumulated in your NPS account at the time of retirement.
- Lumpsum amount: This is the amount you can withdraw as a lumpsum at the time of retirement after buying an annuity plan.
- Monthly pension: This is the amount you will receive as a monthly pension from your annuity plan.
Benefits of using NPS calculator
NPS calculator has several benefits for planning your retirement:
- It helps you understand how NPS works and how it can help you achieve your retirement goals.
- It helps you compare different scenarios and choose the best option for your retirement needs.
- It helps you track your progress and make adjustments to your investment strategy if needed.
- It helps you estimate your tax liability and tax benefits from NPS.
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