Retirement Planning · After Retirement
Annuity / Pension Calculator
See how much regular pension an immediate annuity pays for your purchase price, how long it takes to get your money back, the return it implies if you live to a given age, how inflation erodes a fixed pension, and the corpus needed for a target pension.
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Your inputs
Quick start — try a typical case
₹ 50 lakh
From an insurer's quote for your age and option. Life-only options pay more than return-of-purchase-price ones.
Your result Live
Monthly Pension
₹29,167
₹3,50,000 a year for life, from ₹50,00,000 at 7.00%
- After Tax
- ₹26,250 per payment
- Years to Get Your Money Back
- 14.3 years (age 74)
- Total Received if You Live to 85
- ₹87,50,000
- Return Implied (living to 85)
- 5.09% a year
- Buying Power of the Pension at 85
- ₹81,550 a year in today's money (−77%)
- Pension received · 64%₹87,50,000
- Purchase price · 36%₹50,00,000
With a life annuity the purchase price is used up — nothing is returned on death, but the rate is higher.
The pension is fixed: it doesn't rise with inflation unless you buy an increasing annuity (which starts lower).
An estimate from the assumptions you entered, not a guaranteed outcome.
How this is calculated
Pension per payment = Purchase price × Annuity rate ÷ Payments per year · Price for a target = Target × Payments per year ÷ Rate
- Annuity rate
- Yearly pension as a % of the purchase price, quoted by the insurer
- Implied return
- The rate at which the payments (and any returned price) are worth exactly the price paid
An immediate annuity converts a lump sum into a guaranteed income for life. The annuity rate is not an investment return: with a life annuity you are spending your capital as well as earning on it, so the true return depends on how long you live. The calculator shows that implied return, the payback period, and how a fixed pension loses buying power over a long retirement.
Assumptions & sources
- Annuity rates vary by insurer, age, option and frequency; use a current quote. Payments are made at the end of each period.
- Tax is applied at your marginal rate; in India annuity income is taxed as income from other sources (or pension).
- 1Annuity products — consumer guidance — IRDAI — Insurance Regulatory and Development Authority of India
- 2Retirement Income and Annuities — CFA Institute — Private Wealth Management curriculum
Calculator ID FIN-RETPLAN-ANNUITY-001 · version 1.0.0
Common questions
Is the annuity rate my return?
No. For a life annuity, each payment includes part of your own capital. The real return depends on how long you live — the calculator shows it for the age you choose.
Life annuity or return of purchase price?
Life-only pays more but leaves nothing behind. Return of purchase price pays less but gives the lump sum to your nominee. Joint-life options continue the pension to a spouse.
Should I buy an annuity with my NPS corpus?
NPS rules require part of the corpus to buy an annuity (the share depends on your corpus and subscriber type). Compare insurers' quotes and options before choosing — the NPS calculator shows the required share.