APY Calculator

Atal Pension Yojana (APY)

The Atal Pension Yojana (APY) calculator from Investkraft is an efficient tool designed to calculate the actual interest earned on an investment within the pension scheme. The APY Calculator helps you ascertain the desired pension amount and the appropriate age to enroll in the program.

For added convenience, this calculator provides an instant estimate of the interest you would accumulate on your pension. Furthermore, it assists in preventing common calculation errors. Consequently, this software proves invaluable to employees in both the public and private sectors who are planning their retirement.

How Does Atal Pension Yojana (APY) Work?

Introducing the Atal Pension Yojana (APY), a national pension plan designed for workers in the unorganized sector. Even those in the private sector without a formal pension plan can benefit from APY. It's a government initiative launched during the 2015-16 Union Budget to encourage people to save modest amounts and enjoy a steady monthly income post-retirement.

• To join, you need to be between 18 and 40 years old, with a minimum contribution period of 20 years until you reach 60.
• Upon reaching 60, you're entitled to a guaranteed monthly pension, ranging from INR 1,000 to INR 5,000, depending on your contributions. Starting early means lower contributions.
• Anyone can invest, but the focus is on the unorganized sector. You can choose your desired pension amount, and your contributions are determined accordingly.
• Adjustments can be made annually in April.
• There's a penalty for missed payments, ranging from INR 1 to INR 10, and if you default for six months, your account is frozen, deactivated after 12 months, and closed after 24 months.
• Tax benefits are significant, with up to INR 1.5 lakhs under Section 80CCD (1) and up to INR 50,000 under Section 80CCD (1B).

We will now proceed to discuss the APY calculator formula and how you can calculate your pension amount based on your regular investments with the help of an example.

Atal Pension Yojana Calculator Formula

APY = (1 + r/n)n – 1

where,

r – stands for the interest rate.

n – stands for the number of times the interest is compounded per year.

Let's consider the case of Sunil, a 30-year-old individual working as a carpenter in a small town in India. Sunil is concerned about his financial security during his retirement years and decides to enroll in the Atal Pension Yojana (APY) to receive a monthly pension of Rs. 5000 after he turns 60.

Here's how Sunil might plan his contributions to achieve this:

1. Sunil joins the Atal Pension Yojana at the age of 30.
2. Sunil’s goal is to receive a pension of Rs. 5000 per month after he turns 60.
3. Sunil calculates his contributions based on his age of enrollment and desired pension amount. Since he joined at the age of 30, he has approximately 30 years until he reaches 60. To receive a pension of Rs. 5000 per month, Sunil needs to make contributions according to the prescribed chart provided by the scheme.
4. Sunil checks the contribution chart provided by the Atal Pension Yojana. Let's assume that for a monthly pension of Rs. 5000, the prescribed monthly contribution is Rs. 900. This is an approximate figure and actual contribution amounts may vary based on factors such as age at enrollment.
5. Sunil ensures that he makes regular contributions of Rs. 900 per month towards his Atal Pension Yojana account until he reaches the age of 60.
6. Depending on his income and other factors, Sunil may also be eligible for a government co-contribution, which could further augment his pension savings.

By diligently contributing Rs. 900 per month to his Atal Pension Yojana account for the next 30 years, Sunil aims to secure a monthly pension of Rs. 5000 once he reaches the age of 60. This provides him with a sense of financial security and stability during his retirement years, ensuring that he can maintain a decent standard of living even after he stops working.

Atal Pension Yojana (APY) Indicative Monthly Contribution Chart

What are the Benefits of Atal Pension Yojana?

Discover the perks of the Atal Pension Yojana, a government-backed pension plan below:

• Enjoy a secure retirement with benefits backed by the Government of India.
• Receive a guaranteed pension ranging from Rs. 1,000 to Rs. 5,000, depending on your contributions.
• Get tax benefits under Section 80CCD (1) of the Income Tax Act, 1961, by contributing to APY.
• It's simple for Indian residents, whether self-employed or salaried, to sign up.
• APY accepts subscriptions from individuals already contributing to other pension schemes.
• Rest assured with guaranteed benefits for your spouse, nominee, or next of kin in case of your demise.
• Customize your pension amount by upgrading or downgrading according to your preferences.
• Choose your subscription frequency: monthly, quarterly, or half-yearly.
• Both organized and unorganized sector workers can subscribe to APY for a secure future.