The National Pension System, or NPS, has emerged as an attractive and low-cost investment option for people who are searching or looking to create a corpus for their retirement.
This investment tool offers Indian citizens an additional deduction for tax savings of up to Rs 50,000 under subsection 80 CCD (1B), in addition to the chance to build a retirement fund by investing in four asset classes of their choice. This is beyond the Rs 1.5 lakh deduction investment allowed under section 80C. The power to invest and increase one’s retirement fund rests with the investor because investments are market-linked and dependent on the performance of asset classes and investment decisions made by the investor.
By enabling investors to select between debt and equity based on their risk tolerance, the NPS calculator provides an estimation of the anticipated retirement corpus. Thus, it serves as a valuable resource for making informed decisions about NPS investments.
Who can use the NPS calculator?
The NPS pension calculator can be used by all those eligible to invest in the NPS scheme. According to NPS rules and regulations, Indian citizens between the age of 18 and 60 are eligible to invest in the scheme, respectively. Individuals must, however, submit the necessary Know Your Customer (KYC) documents before investing in the plan.
National Pension Scheme Calculator – Features
The National Pension Scheme Calculator has several useful features-
- Anyone can use the NPS return calculator as its interface is very simple
- The NPS pension calculator can help you to calculate the right amount of your pension.
- It also highlights how much you invested, earned, and how much you will get at maturity.
- The NPS pension calculator is available to anyone if he/she is eligible to invest in the National Pension Scheme
Steps to calculate the required monthly investment
NPS pension calculator offers an opportunity to find out the required investment amount to gain planned retirement savings. It can be very useful for the users who have already planned their goals or retirement amount and they would invest in an NPS scheme according to their goals. Here are the few steps, you can follow while using the National Pension Plan calculator:
Step 1 – Enter the goal amount – Put the goal amount in your mind that you want to collect for your retirement years.
Step 2 – Select growth rate or investment planning – Investors can achieve their goals based on their investment planning and risk profile. They can choose from aggressive, moderate, conservative, or custom risk profiles. Custom risk profile gives them an opportunity to predict their rate of return as per their future requirement.
Step 3 – Age – Put your age and other vital factors for the NPS to calculate your retirement amount!
The NPS pension calculator computes the monthly investment required to attain the goal amount at maturity based on the information provided in the three steps. A pie chart offers a visual representation of the invested amount and interest earned during the investment period. The calculator also displays the money saved by the investor through NPS investments during the investment tenure. Additionally, users can perform scenario analysis by adjusting the goal amount for inflation using different inflation scenarios of 4%, 6%, and 8%. This feature empowers users to anticipate the impact of inflation on their retirement savings and modify their investments accordingly.