Know Your NPS Annuity: What should be your annuity investment to get Rs 1.10 lakh monthly pension; know here
NPS Annuity Calculator: National Pension System (NPS) is a retirement scheme that helps an account holder create a corpus. At maturity, the subscriber can withdraw the lump sum amount and purchase an annuity plan from the rest of the amount. The return from annuity investment helps one get a monthly pension post retirement.
NPS Annuity Calculator: National Pension System (NPS) is a retirement scheme open to all Indians. NPS account holders can contribute a lump sum amount or on a monthly basis to their NPS account. Starting from 18 years of age, NPS account holders can invest till 75. Since NPS is a market-linked scheme, the account holders can get higher returns than many non-market-linked retirement schemes. If the account holders start investing early and remain consistent with their investment, they can create a corpus that can help them or maintain financial freedom post retirement. When they turn 60, they get the option to withdraw their retirement corpus. However, they can withdraw up to 60 per cent only. From the rest of the 40 per cent amount, they need to purchase an annuity plan. They get return on this annuity investment, which they withdraw in the form of a monthly pension. They can set the monthly pension amount as per their requirement, annuity investment capacity, and the returns that get in the annuity plan. In this write-up, we will tell the annuity investment amount one needs to invest to get Rs 1.10 lakh monthly pension in all 5 NPS categories. We will also tell what the minimum and maximum pensions will be available under different categories after that investment. (Data source: NSDL website).
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Types of NPS pensions
NPS offers 5 types of monthly pension: Annuity for life with return on purchase (ROP), annuity for life without ROP, joint life annuity with ROP, joint life annuity without ROP, and family income with ROP.
How we will calculate NPS annuity amount
We will take the example of a 60-year-old private sector employee whose wife's age is 58 years.
Minimum amount to get Rs 1.10 lakh monthly NPS pension in 5 categories
The minimum annuity investment to get a Rs 1.10 lakh monthly pension is Rs 1,87,50,000 (Rs 1.88 crore).
See, here is the minimum and the maximum monthly pension available in 5 NPS categories after a Rs 1,87,50,000 annuity purchase.
Monthly pension in annuity for life with ROP
In this type of NPS pension, the annuity amount stops after the annuitant's death, and the return on purchase (ROP) is returned to the annuitant's nominee.
Monthly pension in annuity for life with ROP
On a Rs 1,87,500,00 annuity purchase, the maximum monthly pension available in this category is Rs 1,10,385, and the minimum is Rs 96,848.26.
Monthly pension in annuity for life without ROP pension
In this pension category, the annuity amount ceases on the annuitant's death, and the purchase amount is not returned to the nominee.
Monthly pension in annuity for life without ROP pension
A Rs 1,87,500,00 annuity purchase in this category can help an NPS account holder get a maximum monthly pension of Rs 1,45,184.00. The minimum pension available is Rs 1,16,245.
Monthly pension in joint life annuity with ROP
In this type of NPS pension, the annuity amount is paid to the spouse during their lifetime, and ROP is returned to the nominee after the spouse's death.
Monthly pension in joint life annuity with ROP
On a Rs 1,87,500,00 annuity purchase, the maximum NPS monthly pension in this category is Rs 1,10,197.00, and the minimum is Rs 96,699.89.
Monthly pension in joint life annuity without ROP
In this NPS pension category, after the annuitant's death, the annuity amount is paid to the spouse during their lifetime. If the spouse predeceases the annuitant, the annuity will cease after the annuitant's death.
Monthly pension in joint life annuity without ROP
On a Rs 1,87,500,00 annuity purchase, the maximum monthly pension available is Rs 1,28,271.00, while the minimum is Rs 1,01,253.
Monthly pension in family income with ROP
In this NPS pension category, the spouse gets a monthly pension for lifetime after the annuitant's death. After the spouse's death, the annuity goes to the living dependent mother and father of the deceased annuitant. After all these family members are covered, the annuity ceases, and the full payment is returned to the surviving children or legal heirs of the annuitant.
Monthly pension in family income with ROP
A Rs 1,87,500,00 annuity purchase in this category will provide a maximum monthly NPS pension of Rs 1,10,197.00 and a minimum pension of Rs 92,840.
NPS Annuity Chart
| (With ROP) ₹ | (With ROP) ₹ | (With ROP) ₹ | (Without ROP) ₹ | (Without ROP) ₹ | |
| Edelweiss Tokio Life Insurance Co. Ltd | |||||
| TATA AIA Insurance Co. Ltd | |||||
| IndiaFirst Life Insurance Co. Ltd | |||||
| ICICI Prudential Life Insurance Co. Ltd | |||||
| Bajaj Allianz Life Insurance Co. Ltd | |||||
| Canara HSBC Life Insurance Co. Ltd. | |||||
| PNB Metlife India Insurance Co. Ltd | |||||
| Star Union Dai-ichi Life Insurance Co. Ltd | |||||
| SBI Life Insurance Co. Ltd | |||||
| Kotak Mahindra Life Insurance Co. Ltd | |||||
| Life Insurance Corporation of India | |||||
| HDFC Life Insurance Co. Ltd | |||||
| Aditya Birla Sun Life Insurance Co. Ltd | |||||
| MAX Life Insurance Co. Ltd | |||||
| Shriram Life Insurance Co. Ltd. |