Annuity
An annuity is a financial product sold by insurance companies (Annuity Service Providers like LIC, SBI Life) that pays out a fixed stream of income to an individual. In NPS, you use a part of your maturity corpus to buy this to ensure a regular pension.
Lump Sum
The one-time payment you receive at the time of retirement. Under current NPS rules, you can withdraw up to 60% of your total accumulated corpus as a tax-free lump sum.
Tier I Account
The primary retirement account with a lock-in period until age 60. Contributions here are eligible for tax deductions. This calculator focuses on Tier I projections.
Tier II Account
A voluntary savings account with no lock-in period. You can withdraw money anytime, but it offers no tax benefits. It works like a low-cost mutual fund with very low expense ratios.
PFRDA
The Pension Fund Regulatory and Development Authority is the government body that regulates and oversees the NPS to ensure your money is safe and managed transparently.
POP (Point of Presence)
These are the banks or financial institutions (like HDFC Bank, SBI, ICICI Bank) that act as the interface for you to open and manage your NPS account.
Asset Allocation (Active vs Auto)
Active Choice lets you decide the split between Equity (E), Corporate Bonds (C), and Govt Securities (G). Auto Choice automatically adjusts the risk based on your age.