The Pension Fund Regulatory and Development Authority (PFRDA) has made important changes to the National Pension System (NPS) for non-government subscribers.
Earlier, retirees could withdraw only about 60% of their savings as a lump sum at retirement. Now, they can withdraw up to 80%. Only 20% of the corpus needs to be used to buy an annuity, which pays regular pension.
For people whose total NPS savings are Rs 8 lakh or less, they can withdraw 100% of their money without buying an annuity. Those with savings between Rs 8 lakh and Rs 12 lakh can withdraw up to Rs 6 lakh as a lump sum; the rest must be used for an annuity or periodic withdrawals.
Subscribers can also withdraw gradually over time using a new option called Systematic Unit Redemption (SUR), instead of taking all the money at once. They can defer withdrawal or annuity purchase up to age 85, giving more flexibility in retirement planning.
Partial withdrawals before age 60 are now easier, and after 60, retirees can make multiple withdrawals with a minimum gap of three years. Special rules also allow full withdrawal if someone gives up Indian citizenship or is declared missing or presumed dead.
These changes give retirees more control over their money, making it easier to meet retirement expenses, pay off debts, or reinvest. Subscribers with smaller savings can now access their money more easily.
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