NPS subscribers are allowed to withdraw up to 60% of their pension corpus, through the SLW on a monthly, quarterly, half-yearly, or annual basis for a period till 75 years of age as per the choice at the time of their normal exit. The SLW facility is similar to the Systematic Withdrawal Plan (SWP) under Mutual Funds. With the SLW facility, NPS subscribers can withdraw the desired amount systematically at regular periodic intervals.
“Upon reaching 60 and up to 75, subscribers must allocate at least 40% of their corpus to purchase an annuity. The annuity provides periodic payments based on its terms. The remaining corpus can be withdrawn as a lump sum or systematically through the SLW method.
SLW allows retirees to receive periodic cash flows, enhancing their post-retirement income and covering regular expenses. This withdrawal method can be chosen once, and payments will follow the subscriber's preference," said Kurian Jose, CEO, of Tata Pension Management. Exciting news! Mint is now on WhatsApp Channels. Subscribe today by clicking the link and stay updated with the latest financial insights! Click here As per Kurian Jose, SLW is an attractive option for retirees seeking a consistent income stream during their retirement years.
It can be requested when a subscriber retires and applies to the lump sum NPS corpus after purchasing the annuity. NPS is a Govt of India-sponsored program, which is regulated by PFRDA. An NPS subscriber invests in the capital market (equity, govt securities, corporate bonds, and alternative assets) as per their respective risk appetite to build up his retirement corpus.
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