Calculate the monthly pension income you can draw from a retirement corpus over a fixed period. Useful when you reach retirement and need to convert your accumulated savings (NPS, EPF, mutual funds, FDs) into a steady payout.
Frequency
Periodic pension
₹1,06,017
monthly
Total received
₹3,18,05,064
Over 25 years
Interest component
₹1,68,05,064
Earned during payout
Total payout breakdown
Pension stops at the end of the chosen period. For lifetime income with guaranteed continuation, look at insurer annuities. Pension income from NPS-bought annuities is taxable as salary income at your slab rate.
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At retirement, the wealth-building phase ends and the wealth-distribution phase begins. The question shifts from 'how do I grow my corpus' to 'how much can I safely withdraw every month for the next 20-30 years without running out'. This calculator answers that question precisely: given your corpus, expected return during retirement, and the number of years you want the income to last, it computes the constant monthly pension your corpus can support.
For Indians, retirement income comes from a mix of sources: EPF/PPF lump sums, NPS (40% mandatory annuity + 60% lump sum), mutual fund holdings, FDs, RBI Bonds, SCSS (Senior Citizen Savings Scheme), and any private pension or insurance annuity. This calculator treats the corpus generically - feed in your total available capital and the rate you can sustain on it, and you get the constant payment. Use the SWP calculator on this site if you want to model a Systematic Withdrawal Plan from mutual funds specifically.
Enter your retirement corpus (the lump sum available for pension).
Set the expected return on the corpus during the payout phase (typically 6-8% in debt instruments).
Pick the number of years you want the pension to last.
Choose payout frequency - monthly is most common for living expenses.
Read the pension amount and the total you'll receive.
The corpus is treated as the present value of an annuity. The calculator solves for the constant periodic payment that the corpus can support over the chosen period at the chosen rate. The corpus shrinks as you withdraw but earns return on the remaining balance.
Payment = Corpus × r / [1 − (1 + r)^−n]
The pension calculation uses the present-value-of-annuity formula in reverse. The corpus is treated as the present value; the periodic rate and number of periods are given; the calculator solves for the payment that makes the equation balance. Mathematically: Payment = Corpus × r / [1 − (1 + r)^−n]. This produces a constant payment that, combined with interest earned on the shrinking balance, exhausts the corpus exactly at the end of the chosen period.
Return assumptions during retirement should be conservative. Indian retirees typically allocate 70-80% to debt for capital preservation: FDs (6-7%), RBI Bonds (7.15%), SCSS (8.2% for senior citizens up to ₹30 lakh), and PMVVY-style monthly income schemes. The remaining 20-30% in conservative hybrid mutual funds adds growth without overwhelming risk. A blended portfolio rate of 7-8% is a reasonable planning number; aggressive retirees can push to 8.5%.
Inflation is the silent killer of fixed-rupee pensions. ₹50,000/month today buys what ₹17,000 buys in 25 years at 6% inflation. For true purchasing-power preservation, you need either an inflation-indexed pension (rising payments year-over-year) or a real-return approach where you withdraw only the inflation-adjusted yield. Most retail pension annuities offered by Indian insurers are nominal (fixed rupee) - flexible SWPs from mutual funds offer better inflation matching.
Monthly pension ≈ ₹77,530. Total received over 20 years: ₹1.86 crore. Total interest earned during distribution phase: ₹86 lakh. This is the 'sustainable monthly burn rate' on a ₹1 crore corpus held in mostly-debt instruments - a useful planning anchor for middle-class retirees.
Monthly pension ≈ ₹1.55 lakh. Total received: ₹4.64 crore. Significant interest earnings because the longer period and slightly higher return compound favourably. This profile fits a retiree who built a larger corpus (mix of EPF, NPS, mutual funds) and accepts moderate equity exposure for the slightly higher return.
Functionally similar - both pay a periodic income from a lump sum. In India, NPS allows partial withdrawal at retirement and the rest must be used to buy an annuity from an insurance company. EPF/PPF give a lump sum that you can invest yourself for pension-like income (SWP).
6-7% from FDs, 7-8% from senior-citizen schemes (SCSS, RBI Bonds), 8-10% from balanced/hybrid funds. Most retirees stay 70-80% in debt for capital preservation.
Annuities offer guaranteed income for life but rates are low (5-6%) and you give up the corpus. SWP from mutual funds is more flexible - you keep control, can leave inheritance, and earn 7-9%, but no guarantee. Many retirees split - annuity for essentials, SWP for rest.
Yes. Pension from an annuity is taxed as 'salary'. SWP from equity mutual funds is taxed as capital gains (LTCG). Senior citizens get extra exemptions and slabs that reduce the bite.
Withdraw only the real return (return − inflation). At a 7% return and 6% inflation, you can sustainably withdraw about 1% of the corpus per year and the principal stays intact in real terms.
Yes - but you need a larger corpus or a higher return. Build inflation-indexed payouts (a 'rising' pension) by withdrawing 6% in year 1 and increasing 6% per year. Compute the corpus needed using the Retirement Calculator.
Indian financial products - home loans, fixed deposits, mutual funds, NPS, insurance - each carry their own quirks: monthly reducing balance vs flat-rate interest, quarterly vs monthly compounding, indexation on capital gains, the choice between the old and new tax regime. We design every finance calculator to use the formula that an Indian bank, AMC, or insurer would actually use, and to surface the assumptions in plain English so you can audit the result against your own statement.
Use this calculator alongside the EMI, SIP and inflation calculators to plan your money holistically. A standalone EMI number means little until you compare it with your in-hand salary, your existing debt-to-income ratio, and the impact of inflation on the real cost of the loan. The related-tool grid below makes it one click to chain these analyses together.
The Pension Calculator is part of the Finance suite on Online Calculator Tools, alongside 6 related calculators. All tools share the same UI patterns, the same privacy-first rendering (nothing is sent to a server), and the same commitment to showing the formula and assumptions behind every result.
