NPS Retirement Income Scheme

PFRDA has launched a new Retirement Income Scheme inside NPS that lets you stay invested after retirement and withdraw money systematically — instead of being forced to buy an annuity immediately. Here's what it means for your retirement plan.

Here's what happened: PFRDA introduced the Retirement Income Scheme (RIS), giving NPS subscribers a flexible withdrawal option that combines variable asset allocation with systematic payouts post-retirement.. RIS works alongside the existing Systematic Lump Sum Withdrawal (SLW) facility — subscribers can stay invested in market-linked NPS funds and draw down their corpus gradually.. The mandatory rule remains unchanged: at least 40% of your NPS corpus must be used to purchase an annuity at retirement; only the remaining 60% gets this new flexibility..

What you should do: Check your current NPS corpus on the NPS Trust portal or your CRA (NSDL/KFintech) app to estimate how much will be available for flexible withdrawal vs. mandatory annuity.. Compare annuity rates from NPS-empanelled insurers (like LIC, SBI Life, HDFC Life) against what a systematic withdrawal from RIS or SLW could realistically deliver over 20 years.. If you are 45 or older, speak to your HR or a SEBI-registered financial advisor now to model whether shifting more NPS contributions to equity (up to 75%) makes sense before retirement..

Pro tip: Under the existing SLW facility, you can defer your entire 60% lump sum withdrawal up to age 75 — keeping it invested in NPS equity funds far longer than most people realise, potentially beating annuity returns.