The National Pension System (NPS) is a retirement product in which you need to invest till 60 years of age, also the retirement age. At 60, you can withdraw 60% of the money, but you need to buy an annuity product that gives you pension for life from the remaining 40%. Of course, if you wish you can buy an annuity product from the entire corpus.

But what if you are not ready to withdraw from the NPS just yet? There are rules that let you defer the annuity phase and continue investing in NPS. Here are the details.

If you are below 60 years

If you are 18 years of age, you can invest in the NPS up to 60 years of age. On maturity, you have three options other than the default option in which you can annuitise the entire amount or a minimum of 40%.

You can annuitise the minimum mandatory corpus but keep the rest invested and withdraw it at 70 years of age. You can contribute further till 70 years of age after which you need to withdraw it.

You can also defer the annuity payment for three years from the time of exit. These options give you flexibility; so make sure you go over them carefully.

But if the maturity corpus is Rs2 lakh or less, you can withdraw all of it and not go for an annuity.

If you are above 60 years

Owing to better health, longevity and demand by people, the Pension Fund Regulatory and Development Authority (PFRDA) last year increased the entry age to 65 years.

This means if you are more than 60 years of age but less or equal to 65 years, you can start investing in the NPS. You need to invest for a minimum of three years and not more than 70 years of age.

Subscribers will enjoy the same investment choices and the same rules on exit will apply as on subscribers who are 60 years of age or less.

Is Early exit possible?

Early exit from NPS is considered when you choose to leave NPS before retirement or before three years if you began investing after 60 years of age.

Being a retirement product, NPS discourages early exits and so what you get in your hand is only 20% of the corpus. The remaining 80% needs to get annuitized compulsorily.

So, before investing in NPS, decide how much you want to invest in the NPS. However, remember that NPS does allow partial withdrawals.

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