Your personal AI for understanding and tracking your personal finance.
Your personal AI for understanding and tracking your personal finance.
Project your National Pension System Tier 1 corpus at age 60. Asset allocation, monthly pension, and the bonus ₹50k 80CCD(1B) deduction.
NPS Corpus at Age 60
60% Lump Sum (tax-free)
Withdrawn tax-free at age 60. Use for major one-time expenses, medical, or to invest in equity for ongoing growth.
40% Annuity (mandatory)
→ Monthly pension: ₹60,847/mo for life. Pension income is fully taxable as ordinary income.
💰 Tax savings on annual contributions (Old Regime)
Most overlooked: the bonus ₹50,000 deduction
Section 80CCD(1B) gives you an EXTRA ₹50,000 deduction on NPS Tier 1, OVER AND ABOVE the ₹1.5 lakh 80C cap. That's an additional ₹15,600/year saved at 30% bracket. Over 30 years of contributions, that's ₹4.68 L in tax savings — and the underlying ₹50k still earns NPS market returns. Best free tax benefit most Indians don't use.
See your NPS, EPF, PPF, and Reksa Dana retirement balances together. Felix flags 80CCD(1B) capacity each year so you don't miss the bonus deduction.
Download Richify — It's FreeNational Pension System (NPS) Tier 1 is India's voluntary, government-backed retirement scheme regulated by PFRDA. You contribute monthly until age 60.
At maturity (age 60), at least 40% of your corpus is used to purchase an annuity (giving you lifetime monthly pension), while up to 60% can be withdrawn as a tax-free lump sum. NPS Tier 1 has lock-in until age 60 — you cannot withdraw freely.
Tier 2 is a voluntary, no-tax-benefit account with no lock-in.
NPS returns depend on asset allocation. Equity (E) component has historically delivered 11-13% CAGR over long periods; corporate debt (C) gives 9-10%; government bonds (G) give 7-8%.
A typical 'aggressive' allocation (75% E + 25% C/G) has averaged 10-11% CAGR over the past decade. PFRDA's Active Choice lets you control the mix; Auto Choice glide-paths from equity-heavy in your 30s to debt-heavy near retirement.
NPS, PPF, and ELSS each have a place in a diversified retirement plan: PPF (7.1% guaranteed, EEE, 15y lock-in) for risk-free 80C; ELSS (12-15% historical, 3y lock-in, LTCG at 12.5% above ₹1.25L of gains per FY) for liquidity and equity exposure; NPS (9-12% expected, until age 60, 60% tax-free + 40% annuity) for the extra ₹50k 80CCD(1B) deduction. Most financial planners recommend ALL THREE: max your 80C with PPF + ELSS, then add NPS for the bonus deduction.
PFRDA mandates the 40% annuity to ensure NPS provides lifetime pension income — its original goal. The annuity creates a monthly pension stream you cannot outlive, protecting against longevity risk.
The trade-off: annuity rates in India are currently 6-7%, which is lower than what equity could earn. Some retirees view this as suboptimal; others value the predictable pension.
You can choose your annuity provider (LIC, HDFC Life, ICICI Prudential, etc.) at maturity and pick options like joint life with spouse, increasing pension, etc.
Partial withdrawal up to 25% of own contributions is allowed after 3 years for specified purposes: home purchase, children's education or marriage, medical treatment, starting a business. Maximum 3 partial withdrawals during entire NPS tenure.
Premature exit (full closure before 60) is allowed but at least 80% must go to annuity, only 20% as lump sum — significantly worse than the 60/40 split at age 60. Better to wait if possible.
Section 80CCD(1B) provides an ADDITIONAL ₹50,000 deduction on NPS Tier 1 contributions, OVER AND ABOVE the ₹1.5 lakh Section 80C cap. So you can claim up to ₹2 lakh total on NPS: ₹1.5 lakh under 80C + ₹50,000 under 80CCD(1B).
For a 30% bracket taxpayer, the extra ₹50k deduction saves ₹15,600 in taxes per year (₹50,000 × 31.2% with cess). Over a 30-year career, that's ₹4.7 lakh in tax savings just from the bonus deduction alone.
