The National Pension System (NPS) continues to attract the attention of young and middle-aged investors who want a structured and disciplined retirement plan. With its low-cost structure, flexible investment choices, and the potential for long-term wealth creation, NPS has emerged as a preferred alternative to traditional pension products. A key question that many subscribers ask is: How much monthly pension can one receive if they contribute ₹1 lakh every month?

To understand this, it’s important to look at how age, investment tenure, and asset allocation influence the final corpus.

Starting Early Gives You a Powerful Edge

When it comes to building a large retirement fund, when you start investing matters more than how much you invest. NPS is designed for long-term wealth creation, which means the power of compounding plays a crucial role. Starting at age 30, 40, or 50 can dramatically change the size of your pension as well as the lump sum you receive at retirement.

Beginning early not only multiplies your retirement corpus but also significantly increases your monthly pension. Those who delay the decision end up with a substantially smaller pension—even if the monthly contribution remains the same.

30-Year-Old Investor: Maximum Benefits Over 30 Years

Assume you begin contributing ₹1 lakh per month at age 30. At an average annual return of 10%, your total contribution over 30 years will be ₹3.6 crore. With compounding and NPS asset allocation (75% equity and 25% government securities), this amount can grow to ₹20.69 crore by the time you turn 60.

Under NPS rules, 60% of the final corpus can be withdrawn tax-free as a lump sum. In this scenario, you would receive approximately:

• ₹12.41 crore as a tax-free lump sum

The remaining 40% must be used to purchase an annuity plan. With a standard annuity rate of 6%, your estimated monthly pension will be:

• ₹4.13 lakh per month

If annual returns are slightly higher, say 12%, your total corpus at 60 may rise to ₹30.64 crore, boosting your pension to nearly:

• ₹6.12 lakh per month

Starting at 40: Decent Returns but Smaller Pension

If you begin investing at age 40, your monthly contribution remains ₹1 lakh, but your investment horizon reduces to 20 years. Over this period, you would contribute ₹2.4 crore, which may grow to approximately ₹7.2 crore at a 10% annual return.

Under NPS withdrawal rules:

• ₹4.32 crore (60%) will be available as tax-free lump sum

• The remaining ₹2.88 crore will buy an annuity

At a 6% annuity rate, this gives an estimated monthly pension of:

• ₹1.44 lakh per month

While the pension is still substantial, it is significantly lower than what a 30-year-old investor would receive.

Starting at 50: Limited Growth, Much Lower Pension

Beginning NPS contributions at age 50 gives you only a 10-year compounding window. Over this period, a monthly contribution of ₹1 lakh results in a total investment of ₹1.2 crore. By retirement, this amount may grow to around ₹2 crore.

This means:

• ₹1.2 crore (60%) as lump sum

• ₹80 lakh invested in annuity

Your estimated monthly pension at 6% annuity return:

• Approximately ₹40,057 per month

This shows how a late start dramatically reduces retirement benefits.

Withdrawal Rules: 60% Tax-Free, 40% for Annuity

At age 60, NPS subscribers can withdraw 60% of their accumulated wealth tax-free. The remaining 40% must compulsorily be used to buy an annuity, which provides guaranteed monthly pension.

NPS offers multiple asset choices—including equity, corporate debt, government bonds, and alternative investments—either through Active Choice or the Life Cycle–based Auto Choice option, where equity exposure can go up to 75%.