NPS vs EPF Calculator: Rs 10,000 monthly investment for 30 years; which retirement scheme can generate higher corpus

Launched in 2004, NPS is a retirement market-linked scheme that offers its subscribers the facility to invest in a lump sum amount and monthly. The minimum contribution in a financial year should be Rs 1,000, while there is no maximum limit. The entry age to invest in NPS is 18 years. One can invest till 75 years of age in a Tier I or a Tier II account.

A Tier I account offers tax benefits. But it comes with a lock-in period, which is the retirement age of 60. At this stage, the NPS subscriber has the option to withdraw their corpus. But they can't withdraw 100 per cent corpus if it is less than Rs 2.50 lakh. They can go for a maximum 60 per cent lump sum withdrawal and need to purchase an annuity plan from at least 40 per cent of the rest of the amount. 

The return from annuity investment provides NPS subscribers with a monthly pension. While contributions up to Rs 2 lakh in a financial year in a Tier I NPS account provide tax benefits, the maturity amount is also tax-free.

While NPS is open to all, EPF is open to private sector employees. In EPF, the employee and the employer contribute monthly to the EPF account of the employee. It offers 8.25 compound interest. The minimum contribution from an employee's side is Rs 1,800, while the maximum is 12 per cent of their basic salary and dearness allowance (DA). 

The employer also matches this amount to contribute to the employer's EPF account. However, only 3.67 per cent of their contribution goes to the EPF account. The rest, 8.33 per cent, goes to the Employees' Pension Scheme (EPS), which provides monthly pension post retirement to the EPF subscriber. 

EPF contributions up to Rs 1.50 lakh in a financial year provide tax benefits under Section 80C of the Income Tax Act, 1961. The interest earned by the EPF subscriber and the maturity amount are also tax-free. 

If one invests Rs 10,000 a month for 30 years, their contribution during that period will be Rs 36 lakh. On this investment, their estimated maturity amount will be Rs 1,54,07,592.06.

We are taking historical returns for our NPS retirement corpus calculations.

The past return under this conservative lifecycle fund has been 9.40 per cent.
The estimated capital gains in this way will be Rs 1,49,13,500, and the expected retirement corpus will be Rs 1,85,13,500.

The past return under this balanced lifecycle fund has been 10.90 per cent.
The estimated capital gains in this way will be Rs 2,11,90,728, and the expected retirement corpus will be Rs 2,47,90,728.

The past return under this aggressive lifecycle fund has been 12.50 per cent.
The estimated capital gains in this way will be Rs 3,04,35,514, and the expected retirement corpus will be Rs 3,40,35,514.

(These are projections. Actual calculations may vary. Do your own due diligence or consult an expert for retirement planning.)