NPS Pension Calculation: How Much Will You Get at 60?

The National Pension System (NPS) builds a retirement corpus from your monthly contributions and market returns. At exit, part of the corpus comes to you as a lump sum and the rest buys an annuity that pays a monthly pension.

How the corpus builds up

Three things drive it:
1. How much goes in: your contribution, your employer's (if any), and how much both rise each year
2. For how long: years until exit, usually 60
3. Returns: depend on your mix of equity, corporate bonds and government securities

The split at exit

At exit, the corpus is divided into a lump sum you receive and an amount used to buy an annuity from an insurer. In late 2025, PFRDA relaxed the rules for non-government subscribers, allowing up to 80% as a lump sum, with at least 20% going to an annuity. Check the current rules for your category, and how any lump sum above 60% is taxed, before you exit.

From annuity to monthly pension

Monthly pension ≈ annuity amount × annuity rate ÷ 12. At a 6.5% annuity rate, every ₹10 lakh in the annuity pays about ₹5,400 a month for life.

A worked example

• Age 32, exit at 60 (28 years), current NPS balance ₹1.85 lakh
• You put in ₹5,000 a month and your employer ₹4,200; both rise 7% a year
• Expected return 9.5% a year

The corpus at 60 comes to roughly ₹3 crore. With 40% going to an annuity at 6.5%, the monthly pension is about ₹65,000, and the lump sum about ₹1.8 crore. At today's prices, after 6% inflation, that pension is worth about ₹13,000 a month. That gap is why starting early and raising contributions matter.

What changes the result the most

• Starting early: ten more years of compounding can double the corpus
• Raising contributions with your salary: a 5 to 10% yearly step-up adds a lot over 25 years
• Asset mix: a higher equity share has historically given higher long-term returns, with more ups and downs
• Employer contribution: if your company offers it, use it; it is also tax-efficient

Tax benefits in brief

Your own contributions can get an extra deduction of up to ₹50,000 under the old regime, over the usual limit. Employer contributions are deductible within limits in both regimes. Rules can change, so check for the current year.

Our NPS Contribution & Pension Estimator shows your corpus year by year, the lump sum and annuity split, the monthly pension in future and today's money, and a what-if table for different returns.