NPS annuity vs lumpsum at exit: what the calculator ignores

Corpus is not the same as spendable cash

At a normal NPS exit, rules generally require buying an annuity with a large slice of the corpus and allow a lumpsum for the rest (percentages depend on the exit path and notifications in force). The annuity pays a periodic income; the lumpsum is what you can redeploy or spend under tax rules then applicable.

Marketing that shows only a terminal corpus without the annuity split overstates flexible cash.

What this site’s NPS calculator does

It projects how contributions and an assumed return might grow. It does not fetch insurer annuity rates, mortality tables, GST on annuity purchase, or your exact tax on the lumpsum. Those quotes change with age, annuity type, and the market when you exit—often decades after you start.

How to plan anyway

Treat the projected corpus as an input: mentally apply the compulsory annuity share, then ask whether the residual lumpsum plus other retirement pots (EPF, taxable investments) cover the flex you want. Closer to exit, get real annuity illustrations. Until then, focus on contribution discipline and allocation you understand—not on fake precision in today’s calculator output.