NPS Calculator

How Does the NPS Calculator Work?

To use HDFC Life’s NPS Calculator online, follow this step-by-step guide:

Step 1: Fill in personal information such as your current age and desired retirement age.

Step 2: Specify your annual income and income growth rate.

Step 3: Mention how much savings you currently have for retirement, along with the investment type.

Step 4: Enter the amount of your monthly expenses (You can mention category-wise expenses too).

Step 5: Based on the details you have provided, you will receive an estimation of your retirement corpus and how much you need to reach that goal.  

For instance, a 30-year-old contributor planning to retire at 60 and saving ₹10,000 per month at an expected 8% annual return can expect a retirement corpus of approximately ₹4.87 Crore. This gives a clear idea of how your monthly contributions grow over time.

Benefits of Using the NPS Calculator

Whether it is estimating retirement corpus or knowing NPS tax benefits, the NPS calculator does it all. Here is the list of benefits it offers:  

1. Estimate Your Future Pension

You can estimate your future pension corpus using the NPS return calculator with ease and accuracy. Simple details such as your age, contribution amount, and expected return rate can help you get an instant idea of how your savings will grow over time.

That way, you receive a clear picture of your potential post-retirement income that can help you make well-informed decisions today to ensure a financially secure tomorrow. Furthermore, these calculators turn complex financial projections into simple insights, enabling you to visualise what your retirement years could look like.  

2. Easy to Use and Accessible

Users across all age groups and financial backgrounds can easily access the NPS calculator by providing only basic information. They receive meaningful results, such as how much money they will accumulate from their contributions in NPS by the time they retire, and how much future savings they will get. Since the tools are available online, intuitive, and easy to navigate, anyone can use them at their convenience, anytime and anywhere.

3. Helps in Setting Financial Goals

When it comes to setting realistic and personalised financial goals, the calculator shows the relationship between your contributions, returns and the future pension amount. It will empower you with the knowledge regarding how much you need to save. Moreover, you will learn how much you will generate through NPS if you start early, say when you are in your early 20s. Early starting will help your contributions grow more through compounding.   

4. Flexibility in Adjusting Parameters

Users have the authority to customise their inputs anytime to experiment with different scenarios, whether it is the contribution amount, rate of return or the retirement age. This flexibility shows how even a slight modification significantly impacts the retirement outcomes.  

5. Helps Monitor Progress Over Time

Using the National Pension Scheme calculator, you can monitor your progress over time. You can adjust your investment strategies as needed by periodically tracking your contributions and pension projections. This will make meeting your retirement goals seamless. 

Who Can Use the NPS Calculator?

Anyone who is going ahead with retirement planning or looking to grow their savings over time can use the NPS calculator. Here is a detailed breakdown:

1. Young Professionals

Investing in NPS will enable young professionals to build a larger retirement corpus through the power of compounding. Starting early, meaning when they are in their early 20s, with even a small portion of their income, will go a long way.

It is best to use the NPS calculator periodically to have an estimation of their future pension. That way, they will get an idea of the long-term value of their regular contributions.

2. Middle-Aged Individuals

Middle-aged individuals, meaning those who are in their 40s, can assess their retirement goals and make necessary changes to the amounts they have contributed towards NPS. For example, if they plan to retire early, say, when they are 55 years old, they can use the NPS calculator to assess how much more contribution they need to make to achieve the expected retirement corpus.  

3. Self-Employed Professionals and Freelancers

Self-employed professionals and freelancers do not have access to employer-sponsored retirement plans; however, they can opt for retail NPS or NPS-Traders. While any Indian citizen aged 18 to 70 can join the retail NPS, NPS-Traders is a specific scheme for traders and self-employed individuals with an annual turnover of less than ₹1.5 crore.

Using the NPS calculator, these people get an idea of how they can build a pension corpus through voluntary contributions.  

4. Government and Private Sector Employees

All central government employees who have joined service in January 2004 and afterwards come under the NPS scheme. The scheme also includes state government employees. For corporate employees, opting for NPS is voluntary.

Whether the NPS contribution is voluntary or default, the pension calculator will allow them to evaluate how much benefit they could get by increasing voluntary contributions. In addition, it will help them understand tax benefits and the significance of planning beyond the mandatory contributions.

5. Retirees

Using the NPS calculator, retirees can check the amount they will receive as monthly income after retirement. In case they are working, they can still contribute to their NPS until the age of 75 by submitting a continuation request at the age of 60. That way, they can increase their monthly income in post-retirement years.

Bridging the Gap: Using Life Insurance to Complete Your NPS Plan

While NPS helps you build a retirement corpus, it does not provide life insurance protection. To ensure complete financial security for your family, especially during your working years, it is advisable to complement your NPS investment with a suitable life insurance plan such as term insurance. Life insurance offers a financial safety net for yousr loved ones by providing a lump-sum payout in case of your unfortunate demise. This ensures that your family's long-term goals such as children's education, home loans, and day-to-day expenses remain protected even if you are not around. Combining NPS for retirement planning with life insurance for protection creates a well-balanced and holistic financial plan.