The National Pension System (NPS) isn’t just a retirement savings plan — it can be your smart income engine after 60. With proper planning, retirees can turn their NPS corpus into steady, inflation-proof monthly income, using options like Systematic Lump-Sum Withdrawal (SLW), balanced asset mix, and step-up payouts.
Top NPS Hacks
- Use SLW (Systematic Lump-Sum Withdrawal): Withdraw monthly instead of taking one lump sum — keep the rest invested to keep earning.
- Mix SLW + Annuity: Combine flexible withdrawals with a lifetime annuity for guaranteed income and stability.
- Stay Tax Smart: Plan withdrawals to stay in a lower tax slab; most NPS gains remain tax-advantaged.
- Keep Some Growth Assets: Even post-60, keep 10–20% in equity for higher long-term returns.
- Step-Up Withdrawals: Increase income by 4–6% every year to beat inflation without draining your corpus too fast.
Benefits
- Steady, rising monthly income.
- Higher growth potential.
- Tax-efficient withdrawals.
- Flexibility & control.
Systematic Lump-Sum Withdrawal (SLW) – NPS Overview
| Feature | Tier I (Retirement Corpus) | Tier II (Voluntary Savings) |
| Purpose | Withdraw up to 60% of corpus gradually to create regular income after retirement. | Withdraw voluntary savings in phases. |
| Annuity Rule | 40% must be used for annuity purchase; not eligible for SLW. | No annuity required. |
| When Allowed | From age 60 or on superannuation (Normal Exit). | Anytime — no age limit. |
| Maximum Age | Up to 75 years (SLW must finish by then). | No upper age limit. |
| Frequency Options | Monthly / Quarterly / Half-Yearly / Annually. | Same as Tier I. |
| Tax Treatment | 60% corpus tax-free; gains during SLW taxable per slab. | Withdrawals taxable per slab; no tax deduction on contributions. |
| Further Contributions | Not allowed during SLW. | Allowed even during SLW. |
| Investment Growth | Remaining balance stays invested and earns market returns. | Same feature applies. |
| Flexibility | Can modify or cancel SLW anytime. | Same flexibility applies. |
Conclusion
By using SLW, balancing annuity and equity, and managing tax smartly, retirees can turn NPS into a powerful income generator — achieving financial freedom and peace of mind well beyond 60.
FAQs
1. What is the best way to get monthly income from NPS?
Ans: Use the Systematic Lump-Sum Withdrawal (SLW) option — it allows monthly or quarterly payouts while your remaining corpus continues to earn returns.
2. How much of my NPS corpus can I withdraw at retirement?
Ans: You can withdraw up to 60% of your corpus tax-free at 60; the remaining 40% must be used to buy an annuity for lifetime income.
3. What is the advantage of combining SLW with an annuity?
Ans: SLW gives flexibility and higher growth, while annuity ensures guaranteed income for life — together, they balance safety and returns.
4. Is keeping equity after 60 risky?
Ans: A small portion (10–20%) in equity helps your money grow faster than inflation, provided you manage it prudently and review annually.
5. How can I make my NPS income inflation-proof?
Ans: Opt for step-up withdrawals (4–6% yearly) so your income rises with expenses while the corpus stays invested and growing.
My self Anita Sahani. I have completed my B.Com from Purbanchal College Silapathar. I am working in Dev Library as a Content Manager. A website that provides all SCERT, NCERT 3 to 12, and BA, B.com, B.Sc, and Computer Science with Post Graduate Notes & Suggestions, Novel, eBooks, Health, Finance, Biography, Quotes, Study Materials, and more.
