NPS: The National Pension System (NPS) is now the top choice for planning your retirement. No matter if you switch jobs or relocate overseas, your NPS account stays with you. This is thanks to the special Permanent Retirement Account Number (PRAN). Let’s dive deeper into it.
Your account stays active even if you change jobs
When a subscriber switches jobs, their NPS account continues to be active. “Since the PRAN is unique, it remains valid forever,” mentioned Ajay Kumar Yadav, Group CEO of Wise Fincircs. If you get a new job and your employer provides Corporate NPS, all you need to do is link your existing PRAN. You can also make contributions yourself via the e-NPS portal or through your bank.
Changing jobs doesn’t affect a subscriber’s NPS corpus. The money stays with the fund manager of your choice, and there’s no alteration in your asset allocation. “If your salary goes up in your new position, you can boost your voluntary contributions,” Yadav points out. This will help you reach your financial objectives more easily.
Yadav also stated, “Even if you move abroad, you can keep contributing to your NPS account as an NRI.” To do this, you’ll need an NRE or NRO account. Contributions and credits can only be made in rupees. You’ll have to update your KYC with your passport, proof of foreign address, and a FATCA/CRS declaration. If you decide to settle abroad permanently, you can maintain the account until you hit 60. After that, you can withdraw the NPS funds to your bank account.
NPS matures when you reach 60 years of age
The NPS matures once you turn 60. You’ll get 60% of your NPS corpus in a single tax-free lump sum, while the remaining 40% is used to buy an annuity. If a subscriber decides to withdraw from the NPS before they turn 60, they can take out 20% of the corpus in one lump sum, but the other 80% must be used to purchase an annuity.