If you are a salarised individual, there is a huge possibility you live your life paycheck to paycheck. You would be able to meet your expenses now. However, have you thought about how will you meet your expenses once you retire, you are likely not going to receive a paycheck then? Financial planning for your retirement is necessary. It ensures that you can enjoy the golden days of your retirement period without the worry of finances.

National Pension Scheme is a social security initiative by the Central government. It is a pension programme that encourages individuals like you to build your retirement corpus. Whether you work for the private, public, or even unorganised sector you can invest in the scheme and secure your financial future. If you wish to determine your investment returns NPS calculator is a great online tool that comes in handy. Here is a detailed guide on the calculator.

About NPS

NPS is a voluntary retirement scheme. You can make periodic contributions to it during your employment. The scheme invests in various Equities and Debt instruments. As per the investment specifications, you need to at least dedicate 50% of your principal amount to Equities. You can always allocate a higher proportion to Equities if you have a higher risk appetite.

NPS follows a fixed tenure concept. You are likely to hold the investment until to attain retirement age. On the maturity of the investment, you can withdraw 40% of the corpus as lump sum. You will receive the reaming 60% of the corpus amount as a monthly pension payment. This is done to ensure that you do not end up using your retirement corpus at once and your financial future is secured.

About NPS calculator

As mentioned, the NPS calculator is an online tool that helps you determine your investment returns. You can choose to calculate NPS returns manually using the formula as well. However, manual calculations are time-consuming and very challenging. There is also a high possibility that its results are not accurate.

NPS calculator online simplifies calculations for you. You just need to enter the key data points of your investment like monthly investment amount, expected return rate, and your current age. On entering this data, the calculator will come up with accurate results in no time.

Usefulness of NPS calculator

NPS calculator is a very useful tool. Firstly, it does away with the hassles of doing manual calculations. Secondly and most importantly, it helps you gauge your investment returns. This helps you determine the value the investment option has to offer. It also aids financial planning both for the present and future.

In the present, as you become aware of the monthly contribution you are required to make every month, you can plan your finances efficiently. For the future, it helps you know the corpus amount you will have in hand, so you plan your retirement accordingly. Hence, you must use the calculator to plan your investment without fail.