National Pension System (NPS) subscribers can now withdraw their full retirement savings — but only under certain conditions.
The rules mainly depend on two things:
How much money you have accumulated and when you choose to exit.
The Pension Fund Regulatory and Development Authority (PFRDA) has updated the withdrawal norms to give more flexibility, especially to those with smaller retirement funds.
Here’s how the new system works.
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When Can You Withdraw 100% of Your NPS Corpus?
If you retire at 60 or later and your total NPS corpus is up to Rs 8 lakh, you can withdraw the entire amount as a lump sum.
Earlier, this limit was Rs 5 lakh.
The increase to Rs 8 lakh gives more freedom to small investors.
If your retirement savings fall within this limit, you don’t need to buy an annuity.
You can take the full amount at once.
What If Your Corpus Is Higher?
If your total NPS savings are between Rs 8 lakh and Rs 12 lakh:
You can withdraw up to Rs 6 lakh as a lump sum
The remaining amount must be withdrawn gradually or used to buy an annuity
For those with more than Rs 12 lakh:
You can withdraw up to 80% as a lump sum
At least 20% must be invested in an annuity plan
The annuity ensures you receive regular pension income after retirement.
More Flexibility for Subscribers
The updated rules also bring other benefits.
Subscribers can now stay invested in NPS until the age of 85, instead of exiting earlier.
During the investment period, partial withdrawals are also allowed.
You can withdraw up to 25% of your own contributions for specific needs, such as emergencies, subject to certain conditions.
What Does This Mean for Retirees?
The revised withdrawal framework tries to strike a balance.
On one hand, it allows retirees easier access to their money.
On the other, it ensures that part of the savings is converted into a steady pension income.
This keeps NPS focused on its main goal — providing long-term retirement security while offering greater flexibility to investors.