Published By: Business Desk
Last Updated: November 02, 2023, 07:00 IST
SLW plan in NPS investments lets you withdraw your corpus in lump sum
PFRDA has lately proposed the introduction of SLW facility, permitting subscribers to make gradual lump sum withdrawals.
The Systematic Lump sum Withdrawal (SLW) plan in NPS investments lets you withdraw your corpus in particular timeframes that too in a lump sum as a substitute of the standard month-to-month pensions.
The Pension Fund Regulatory and Development Authority (PFRDA) has lately proposed the introduction of SLW facility, permitting subscribers to make gradual lump sum withdrawals.
In the stated rule, subscribers can withdraw as much as 60% of their pension fund by way of SLW with month-to-month, quarterly, half 12 months, or annual withdrawal, which may proceed up until their 75 years of age as per their choice on the time of regular retirement.
On October 27, 2023, a round printed by PFRDA made this announcement.
What is the present NPS withdrawal rule?
The present rule, then again, says that subscribers of 60 years or these reaching superannuation can defer annuity and lump sum withdrawal as much as the age of 75 years. A subscriber can withdraw the lump sum both as a single tranche or yearly and may provoke every annual withdrawal.
Protean CRA launched the SLW for the NPS subscribers. This permits subscribers to withdraw the lump sum corpus in elements after maturity, and systematically withdraw the quantity they want each interval just like an SMP in mutual funds.
Advantages of SLW
SLW has a number of benefits because it generates constant money flows, brings in further earnings when mixed with annuity, supplies a method to creating wealth, and in addition presents tax advantages for all such withdrawals.
In this regard, NPS subscribers will probably be free to pick the lump sum with systematic withdrawal for about 60% of their lump sum portion. Forty % will probably be used to buy annuity whereas the remainder of 60% will probably be distributed to buyers. The annuity buy rule will stay unchanged.
About NPS
The National Pension System (NPS) is a voluntary retirement scheme whereby one makes month-to-month contributions to their NPS Tier I or Tier II accounts to safe their non-working years.
The quantity contributed additionally earns curiosity on a month-to-month foundation. The NPS rate of interest typically ranges between 9% and 12%, which is calculated on a compounding foundation that finally results in constructing a big corpus.
