1. What is NPS Annuity?

The National Pension System (NPS) annuity is a regular payment you receive after retirement, calculated based on your accumulated corpus and the prevailing annuity rate.

2. How Does the Calculator Work?

The calculator uses the NPS annuity formula:

Where:

• \( Corpus \) — Total accumulated amount in NPS (₹)
• \( Annuity\ Rate \) — Percentage rate offered by annuity service provider (%)

Explanation: The formula calculates the annual annuity payment you would receive based on your corpus and the annuity rate.

3. Importance of Annuity Calculation

Details: Calculating your expected annuity helps in retirement planning, understanding your post-retirement income, and making informed decisions about NPS withdrawals.

4. Using the Calculator

Tips: Enter your total NPS corpus in INR and the annuity rate in percentage. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical annuity rate for NPS?
A: Annuity rates vary between providers but typically range between 5% to 7% depending on the annuity option chosen.

Q2: Can I withdraw the entire corpus instead of buying annuity?
A: As per current rules, you must use at least 40% of the corpus to purchase an annuity at the time of retirement.

Q3: Is the annuity amount fixed or variable?
A: This depends on the annuity plan you choose - some offer fixed payments while others may offer inflation-indexed payments.

Q4: Are annuity payments taxable?
A: Annuity payments are treated as income and taxed according to your income tax slab.

Q5: Can I change my annuity provider later?
A: Generally, annuity providers cannot be changed once the contract is signed, so choose carefully.