NPS in 2026: Your Retirement Corpus Can Stay

PFRDA's new Retirement Income Scheme lets NPS retirees keep part of their money invested after retirement and withdraw it slowly up to age 85, instead of being forced to buy an annuity all at once.

Here's what happened: PFRDA launched the NPS Retirement Income Scheme in 2026, giving retirees a new way to manage the 60% corpus they can withdraw lump sum at retirement.. Instead of taking the full 60% at once, retirees can keep it parked inside NPS and set up phased withdrawals — monthly, quarterly, or annually — until age 85.. The mandatory 40% annuity purchase rule stays unchanged, but the remaining 60% can now either be withdrawn lump sum (old method) or drawn down gradually under this new scheme..

What you should do: Log in to your NPS account on the CRA portal (NSDL or KFintech) and check your projected corpus at retirement to model both withdrawal options.. Compare annuity rates from empanelled insurers — if rates are low today, the phased withdrawal option lets you delay locking in and stay invested longer.. If you are within 10 years of retirement, revise your NPS contribution split: heavier equity allocation (up to 75% in Tier I Active Choice) now makes more sense if withdrawals stretch to age 85..

Under phased withdrawal, your remaining corpus still earns market-linked returns inside NPS — historically 9–11% for equity funds — meaning your retirement income can actually grow year on year, unlike a fixed annuity.