The numbers
You put in ₹5,000 × 12 × 30 = ₹18,00,000. At an assumed 10% a year, compounding monthly, that grows to about ₹1,13,96,627 — roughly six times what you paid in.
| At 60 | Amount |
|---|---|
| Corpus | ₹1,13,96,627 |
| Lump sum (80%) | ₹91,17,301 |
| … tax-free part (60% of corpus) | ₹68,37,976 |
| … taxable part (20% of corpus) | ₹22,79,325 |
| Annuity purchase (20%) | ₹22,79,325 |
| Pension at 6% | ₹11,397 a month |
What if returns are different?
NPS returns are market-linked. Equity-heavy “aggressive” choices have historically earned more than conservative ones, but nothing is guaranteed. Here is the same plan at other returns (20% annuity at 6%):
| Return a year | Corpus at 60 | Monthly pension |
|---|---|---|
| 8% | ₹75,01,476 | ₹7,501 |
| 9% | ₹92,22,370 | ₹9,222 |
| 10% | ₹1,13,96,627 | ₹11,397 |
| 11% | ₹1,41,51,139 | ₹14,151 |
| 12% | ₹1,76,49,569 | ₹17,650 |
Should you take the full 80%?
You can, but think about tax and about income for life. Only 60% of the corpus is tax-free; the extra 20% would be added to your income in the year you withdraw it, which could push you into a higher slab. Many people take 60% tax-free, put 40% into the annuity (a larger lifelong pension), or use systematic withdrawals to spread the taxable part over several years.
Make it grow faster
The single biggest lever is raising your contribution as your income grows. Setting “Increase contributions each year” to 5% in the calculator lifts the corpus a lot without much pain today. Starting five years earlier helps even more than a slightly higher return.
Which NPS investment choice?
In “Auto choice” your equity share is set by age and reduces as you get older: LC75 starts with up to 75% equity, LC50 with 50% and LC25 with 25%. In “Active choice” you decide the mix yourself, with equity capped at 75% (or more under some newer options). A 30-year-old saving for 30 years usually has time to ride out market ups and downs, which is why the 10% assumption is commonly used — but a conservative mix might earn closer to 8%.
You can change your pension fund manager once a year and your asset mix up to four times a year. Contributions under Tier I are locked until exit; Tier II is a flexible savings account without the same tax benefits. Check your statement each year and nudge the contribution up as your salary grows.
Key NPS figures (checked 5 November 2026)
| Item | Figure |
|---|---|
| Lump sum at 60 (corpus above ₹12 lakh) | Up to 80%; at least 20% annuity |
| Corpus ₹8–12 lakh | Up to ₹6 lakh lump sum |
| Corpus up to ₹8 lakh | 100% lump sum allowed |
| Tax-free share of corpus | 60% |
| Employer contribution deduction (new regime) | Up to 14% of basic + DA |
| Employer PF + NPS + super tax-free cap | ₹7.5 lakh a year |
FAQ
What will ₹5,000 a month in NPS become in 30 years?
About ₹1,13,96,627 at an assumed 10% annual return. You invest ₹18 lakh in total.
How much pension does ₹5,000 a month in NPS give?
About ₹11,397 a month if 20% of the corpus buys an annuity at 6%. A 40% annuity would double that.
How much of the lump sum is tax-free?
₹68,37,976 (60% of the corpus). The remaining ₹22,79,325 of an 80% lump sum is taxable.
Sources (checked 5 November 2026): PFRDA (Exits and Withdrawals under the National Pension System) (Amendment) Regulations, 2025 (December 2025; reported by Business Today, Upstox and Value Research); Income-tax Act provisions on NPS — 60% exemption of lump sum (s.10(12A) of the 1961 Act, continued in the 2025 Act), 80CCD(1), 80CCD(1B), 80CCD(2) at 14% in the new regime; Finance Act 2026. Returns are assumptions, not PFRDA data.