PFRDA launches ‘personalised’ NPS retirement calculator and planner for individuals
Dec 10, 2022
The pension fund regulator - Pension Fund Regulatory and Development Fund (PFRDA)- has launched a personalised retirment calculator for NPS subscribers. This pension planner will help individuals in estimating their annuity retirement income on the basis of their past contributions, expected salary rise among others. Read on to know how this planner can help individuals.
The National Pension System (NPS) regulatory body - Pension Fund Regulatory and Development Fund (PFRDA) has launched an NPS Prosperity Planner (NPP) for individuals. This retirement planner will help individuals estimate the projected retirement income (annuity) as per the annuity options. The estimated retirement income will be calculated on the basis of their existing contribution under NPS.
PFRDA announced the launch of this planner via its circular dated December 9, 2022.
This retirement calculator is available for individuals through Central Recordkeeping Agencies (CRAs). Currently, there are three CRAs - Protean (formerly known as NSDL), Fintech and CAMS.
An individual will be able to see this calculator once they log in to their NPS account with their respective CRA’s. The calculator will offer projected retirement income on the basis of their past contributions, and estimated/projected future rise in salary among other factors.
As per the circular, “NPP provides the tool for higher retirement income through accelerated contribution plan in the residual period until retirement duly considering inflation and the projected cost of living expenses.”
“NPS Prosperity Planner is futuristic and offers personalized retirement planning for the subscribers based on their past contribution, expected income rise in the future and their cost of living,” said the PFRDA.
The calculator can provide the subscriber with reasonable projections that can help them in better retirement planning to ensure adequate and sustainable old-age income says the circular.
NPS is one of the popular investment avenues for saving for retirement. The scheme offers various income tax benefits during the accumulation as well as at the time of maturity.
During the accumulation phase, an individual can claim a deduction of up to Rs 9.5 lakh via NPS. These deductions are claimed via three different sections specified under income tax laws. These are section 80CCD (1) (maximum deduction of Rs 1.5 lakh under the overall umbrella of section 80C), Section 80CCD (1b) (Additional deduction of Rs 50,000) and Section 80CCD (2) i.e., on employer’s contribution to NPS account.
At the time of maturity, 60 per cent of the NPS corpus can be withdrawn as a lump sum. This lumpsum amount is exempted from income tax. The balance 40 per cent has to be mandatorily used for the purchase of annuity income.
The NPP is launched for the benefit of subscribers as part of Azadi Ka Amrit Mahotsav. This planner will assist, empower and handhold the subscribers to plan for adequate retirement income as per PFRDA.
[The Economic Times]