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NPS Retirement Income Scheme: How payouts work, what happens to annuity and where corpus is invested
Mint 2 hrs ago·2 Oct 2026, 12:03 pm
The National Pension System (NPS) offers a flexible way for subscribers to create a retirement corpus. Under the new Retirement Income Scheme, investors can now choose to withdraw a portion of their accumulated savings as a lump sum, while the remaining amount is automatically directed into an annuity plan. This annuity provides a guaranteed, regular stream of income for the rest of the subscriber's life, ensuring financial stability post-retirement.
This structure is designed to balance immediate liquidity with long-term security. By mandating a portion of the corpus be converted into an annuity, the scheme helps mitigate the risk of outliving one's savings. The remaining funds can be used for immediate needs or emergencies, offering a balanced approach to retirement planning that prioritizes both flexibility and safety.
Investors should review the annuity options available, as the payout amount depends on the chosen fund and the annuity purchase rate. It is also important to understand the lock-in periods and tax implications associated with both the lump-sum withdrawal and the regular pension income to make informed decisions.
Excerpt from Mint
The Retirement Income Scheme allows NPS subscribers to receive regular payouts from the designated portion of their corpus. Check how the payouts will work, what happens to the mandatory annuity portion, and how the corpus will be invested. For someone saving through the National Pension System (NPS), retirement…Read the original at Mint
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