What IRR does a ₹70,000/year pension plan give over 10 years?
Based on these numbers, this works out to an approximate IRR of 1.48% over 15 payout years — a simplified single-assumed-age approximation, not actuarial pricing.
Important: this is a simplified approximation, not actuarial pricing
Real annuity pricing uses a full mortality table to probability-weight every possible age of death. This calculator instead assumes one fixed "assumed age at death" that you choose — by default the overall population average life expectancy (around 71–72 years in recent estimates), though annuitants as a group tend to live somewhat longer than the general population, so you may want to enter a higher age. Adjust it to see how sensitive the IRR is to this assumption — that sensitivity is itself useful information. This does not replace the illustration your insurer provides.
How it works
You pay a fixed annual premium for a set number of years. Starting the year after premiums end, you receive an annual payout for as many years as the assumed lifespan implies, plus an optional lumpsum in the death year (many Indian pension plans return the total premiums paid as a death benefit). The calculator solves for the single annualized rate (IRR) that reconciles all these cash flows.
What does "IRR" mean?
IRR (Internal Rate of Return) is just the annual growth rate that would explain the numbers you put in and get out — similar in spirit to an interest rate, but for a stream of payments in and out over time rather than a single lump sum.