New NPS Rules 2026: In the changing times, people’s perceptions of retirement planning have rapidly changed. While the National Pension System (NPS) was previously considered a rigid and long-term locked-in scheme, it has now become significantly more flexible in 2026. Pension fund regulator PFRDA has made significant changes to the rules, conveying the message that investors should have greater control over their money.
Now, NPS is not just a post-retirement pension scheme, but also a financial tool that provides support when needed. Let’s understand in detail how the new rules can strengthen your retirement planning.
Major Age Limit Relief
Previously, there were several entry and exit restrictions in NPS. Now, the maximum entry and exit age has been increased to 85 years. This means that if you wish to continue investing even after 60, you will not be barred. The decision to remain in the scheme or exit will now depend on the investor’s convenience.
Clear Rules for Normal Exit
Clear guidelines have now been established regarding withdrawals. Individuals enrolled in the All Citizen Model can make normal withdrawals upon completing 15 years or at the age of 60, whichever is earlier. For investors in the corporate sector, their retirement age will be considered the exit age. This will make it easier for employed individuals to comply with their organization’s regulations.
Withdrawal Structure Based on Corpus
The withdrawal structure has now been determined based on the total deposit amount. Under normal circumstances, 80 percent of the amount can be withdrawn in a lump sum, and 20 percent must be used to purchase an annuity.
If the total fund is up to ₹8 lakh, the investor can withdraw the entire amount in one go. If the corpus is between ₹8 lakh and ₹12 lakh, a fixed portion can be withdrawn in a lump sum, and the remaining amount can be converted into installments or pension. If the corpus exceeds ₹12 lakh, the 80:20 ratio will apply.
Premature Withdrawal Rules
If an investor wishes to exit before the prescribed age, the rules are relatively strict. In such a case, only 20 percent of the corpus will be available as a lump sum, while the remaining 80 percent will be required to purchase a pension. However, if the corpus is less than ₹5 lakh, the entire amount can be withdrawn.
Complete Nominee Protection
In the event of the investor’s death, the nominee is allowed to receive the entire corpus in one lump sum. The family can also initiate a pension from the same corpus or choose installment payments. This arrangement ensures financial security for dependents.
Exemption for those joining after 60
If an individual joins NPS after 60, the lock-in period will not apply. They can withdraw at any time as per their convenience. The 80-20 rule will apply based on the fund balance at the time of exit, but full withdrawal will be permitted if the balance falls below ₹12 lakh.
Automatic Continuation After Retirement
No additional paperwork is required to continue the plan. The account will automatically remain active even after retirement. Investors can remain in the plan for as long as they wish.
New Loan Facility on NPS
The most significant change is that investors can now take out a loan from a bank based on their NPS account. Banks will provide a loan by marking a lien on 25 percent of the contribution. This will make it easier to raise funds for emergency needs without completely terminating the investment.
Relaxed Withdrawal Frequency
Four partial withdrawals are permitted during the entire service period before the age of 60, provided there is a four-year gap between each withdrawal. After 60, there is no limit on the number of withdrawals, but a three-year gap is required between two withdrawals.
Partial withdrawals are possible for specific reasons
Up to 25% of the contribution can be withdrawn for home purchase, treatment of a critical illness, or repayment of a loan taken from NPS. This facility is designed to meet the needs of the investor and their family.
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Adarsh P
Adarsh Pal is a content writer at Timesbull Media. He specializes in writing news related to industry updates, the automotive sector, banking, telecommunications, the travel sector, and personal finance. Adarsh has previously worked with several digital media channels. He is skilled at presenting news accurately and disseminating information based on...
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