How much can I withdraw from NPS at retirement?

At retirement (age 60), you can withdraw up to 60% of NPS corpus as lump sum (tax-free). The remaining 40% must be used to purchase an annuity.

What is the annuity rate for NPS in India?

NPS annuity rates range from 5.5% to 7.5% annually. A ₹50L annuity corpus at 6.5% provides approximately ₹27,000/month for life.

Should I choose lump sum or annuity from pension?

Take the maximum 60% as lump sum (invest in balanced funds for better returns) and use the 40% for a life annuity with joint-life cover.

What is the bucket strategy for pension withdrawal?

Keep 2-3 years expenses in liquid/debt (Bucket 1), 3-7 years in balanced funds (Bucket 2), and rest in equity for growth (Bucket 3). Refill Bucket 1 from Bucket 2 periodically.

Pension Withdrawal Calculator India 2026

Pension Withdrawal Simulator India — How Long Will Your Retirement Corpus Last? 2025

The pension withdrawal simulator models how long your retirement savings will last based on monthly withdrawal amount, portfolio return, and inflation. Many retirees run out of money because they underestimate longevity or inflation. This calculator helps you find the sustainable monthly income from any corpus size.

85 years

Plan corpus to last until age 85 — Indian life expectancy rising

₹66,667

Monthly pension from ₹1 Cr corpus at 8% return — sustainably forever

Inflation erodes fixed withdrawal by 50% every 12 years

NPS annuity

40% of NPS corpus must buy annuity — typically 5–6% monthly income

📐 Formula

Balance(month+1) = Balance × (1 + r/12) − Monthly Withdrawal

Simulate until balance hits zero or end of target period.

Sustainable monthly income = Corpus × (r/12) — this never depletes principal.

Example: ₹80L corpus, 8% return, ₹60,000/month withdrawal → Corpus lasts approximately 22 years (depletes at age 82 if retired at 60).

🛠️ How to Use

Step 1: Enter total retirement corpus — all liquid assets at retirement.
Step 2: Set expected annual portfolio return (7–9% for conservative balanced fund).
Step 3: Enter desired monthly withdrawal — your actual estimated expenses in retirement.
Step 4: Check the depletion timeline — if corpus depletes before age 85, either reduce withdrawal or build larger corpus.
Step 5: Adjust for inflation: step withdrawal up 5–6% annually, then check new depletion timeline.

💡 Pro Tips

✓ 'Floor and upside' strategy: annuity/FD covers essential expenses (floor), SWP from equity covers discretionary (upside).

✓ NPS annuity typically yields 5–6% annually on corpus — poor returns, but guaranteed for life. Balance SWP and annuity.

✓ Sequence of returns risk: a market crash in first 5 years of retirement is far more damaging than later — maintain 2–3 years of expenses in liquid/FD buffer.

✓ Healthcare costs rise faster than general inflation — budget ₹15,000–₹30,000/month in premiums by age 65.

❓ FAQs

How much corpus do I need to retire at 60? +

With monthly expenses of ₹50,000 at retirement (inflation-adjusted from today), planning for 25 years at 7% post-retirement return: approximately ₹75–85 lakhs. At ₹1 lakh/month expenses: ₹1.5–1.7 crore. Use this calculator for your specific numbers.

What is the difference between pension and annuity? +

Pension: employer-provided guaranteed monthly income (rare in private sector). Annuity: insurance product — you give insurer a lump sum, they pay monthly income for life or fixed period. NPS mandates 40% corpus be used for annuity purchase.

Is NPS annuity return good? +

NPS annuity typically yields 5–6% annually on the annuity corpus — lower than most equity or even balanced fund returns. However, it is guaranteed for life. Most financial planners recommend buying minimum mandatory annuity (40%) and managing the rest as SWP for better overall returns.

What is the best strategy for ₹1 crore retirement corpus? +

Conservative: ₹40L in annuity (guaranteed ₹16,000/month) + ₹60L in balanced fund SWP (₹40,000/month at 8% sustainable). This gives ₹56,000/month total with one guaranteed component. Aggressive: entire corpus in balanced fund, SWP ₹65,000/month (sustainable at 8% return).

How does inflation affect my pension sustainability? +

At 6% inflation, ₹50,000/month in 2025 has only ₹15,600 purchasing power in 2045. A fixed withdrawal loses purchasing power rapidly. Increase SWP by 5–6% annually to maintain lifestyle — this depletes corpus faster but preserves quality of life.

Pension WithdrawalSimulator

Pension Withdrawal Simulator India — How Long Will Your Retirement Corpus Last? 2025

📐 Formula

🛠️ How to Use

❓ FAQs

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