Hi, This is Murali, I am 61 years old, I have invested in NPS around 2 lacs. When I try to withdraw the same it is asking to put CKYC No. How can I get this number?

Ans: Your question is not clear please

Ans: You can close your NPS account prematurely only after 10 years of opening the account. And if you do, you have to utilise 80 per cent of the corpus for buying an annuity plan. Here again, you can be exempted if your total corpus does not exceed Rs 5 lakhs. In such cases, you don't have to buy an annuity plan.

You must get your regular savings bank account converted into an NRE or an NRO account. That is mandatory.

Once your bank account is converted, you need to get your status changed in the NPS records from a resident Indian to an NRI.

Ans: At 42, you cannot withdraw the full amount from NPS.

You can only withdraw up to 20% before 60.

The remaining 80% must be used to purchase an annuity.

Consider staying in NPS for tax benefits.

For better returns, switch to aggressive funds within NPS.

Benefits of Staying in NPS

NPS offers tax benefits under Section 80C and 80CCD.

It provides disciplined retirement savings.

You can switch between fund managers.

NPS has low fund management charges.

Disadvantages of Index Funds

Index funds only track market indices.

They lack flexibility to outperform the market.

Actively managed funds seek higher returns.

Professional fund managers make strategic decisions.

Actively managed funds adapt to market changes.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Calculating the exact amount you need to invest in NPS to achieve a monthly income of Rs 1.35 lakh after retirement involves several factors, such as your current NPS corpus, expected returns, and the annuity rates prevailing at the time of retirement.

To determine the required NPS investment, you'd typically need to consider your expected rate of return and the annuity rates applicable at retirement. Annuity rates can vary based on market conditions and the prevailing interest rates.

It's crucial to consult a Certified Financial Planner to get a comprehensive understanding tailored to your specific situation. They can help you assess your current financial position, estimate your retirement needs, and devise a suitable NPS investment strategy to meet your income goal.

Remember, retirement planning is a complex process, and it's essential to consider various aspects to ensure a comfortable retirement. Seeking professional guidance can provide clarity and help you make informed decisions. Best wishes for your retirement planning journey!

Ans: You have Rs 15 lakhs as your corpus and intend to withdraw Rs 10,000 per month. Your NPS fund is generating a return of 15%. Let us analyse if this plan is sustainable.

SWP in NPS
The NPS provides flexibility in managing your corpus post-retirement. However, it has specific withdrawal rules:

You can withdraw up to 60% of the total corpus as a lump sum.
The remaining 40% must be used for annuity purchase.
If this withdrawal is planned pre-retirement, restrictions may apply.
Can You Sustain Rs 10,000 Withdrawal Monthly?
1. Initial Assessment
Rs 10,000 monthly equals Rs 1.2 lakhs annually.
This represents an 8% withdrawal rate from your Rs 15 lakhs corpus.
At 15% annual returns, the remaining corpus can grow even after withdrawals.
2. Sustainability of Corpus
High withdrawal rates can deplete the corpus during market downturns.
A withdrawal rate of 4-6% is generally safer for long-term sustainability.
3. Impact of Fluctuating Returns
The current 15% return may not remain consistent.
Lower returns in the future can affect the corpus’s longevity.
Steps to Ensure Sustainable Withdrawals
1. Reallocate Corpus Wisely
Use a mix of equity and debt investments to balance growth and safety.
Allocate funds to equity for growth and debt for stability.
2. Use a Conservative SWP Strategy
Start with a lower withdrawal amount.
Gradually increase withdrawals to match inflation and needs.
3. Monitor Performance Regularly
Review your portfolio performance every six months.
Adjust withdrawal amounts based on returns and market conditions.
Taxation Considerations
Withdrawals from NPS are taxable as per your income tax slab.
Ensure that the tax burden does not reduce your effective monthly income.
Alternatives to Consider
1. Hybrid Mutual Funds
These funds offer a mix of equity and debt for balanced growth.
Use SWP from these funds for steady income and reduced risk.
2. Debt Funds for Stability
Short-term and ultra-short-term debt funds provide regular income.
These funds are ideal for maintaining liquidity and stability.
3. Equity for Long-Term Growth
Retain a portion of your corpus in equity for inflation-beating returns.
Diversify with flexi-cap and large-cap funds for stability.
Final Insights
Withdrawing Rs 10,000 monthly is possible but requires careful planning. A lower withdrawal rate can ensure corpus longevity. Diversify your corpus between equity and debt for optimal growth and stability. Regular reviews and tax-efficient withdrawals can sustain your income needs.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment