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Retired at 58: What to do with NPS?

Nitin

Nitin Narkhede  |93 Answers  |Ask -

MF, PF Expert - Answered on Jan 16, 2025

Nitin Narkhede, founder of the Prosperity Lifestyle Hub, is a certified financial advisor with eight years of experience in helping clients design and implement comprehensive financial life plans.
As a mentor, Nitin has trained over 1,000 individuals, many of whom have seen remarkable financial transformations.
Nitin holds various certifications including the Association Of Mutual Funds in India (AMFI), the Insurance Regulatory and Development Authority and accreditations from several insurance and mutual fund aggregators.
He is a mechanical engineer from the J T Mahajan College, Jalgaon, with 34 years of experience of working with MNCs like Skoda Auto India, Volkswagen India and ThyssenKrupp Electrical Steel India.... more
Asked by Anonymous - Dec 31, 2024Hindi
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I superannuated from Corporate job at 58. For NPS, I could not give input for Continuation/ Deferment or withdrawal to NSDL within 1 month. So, I received mail that my account will be transferred to "All Citizen of India Sector" in 90 days. Questions: 1. How do I access the new location account? 2. Can I still apply and give Deferment option? 3. If not, can I withdraw from present account? 4. Will I start getting pension now?

Ans: Dear Friend, After superannuation at 58, your NPS account has been transferred to the "All Citizens of India" sector due to a lack of input for continuation or deferment within the stipulated 30 days. You can still access your account using your existing PRAN credentials on the CRA portal. However, deferment is no longer an option, though you can continue contributing voluntarily until age 70. You can withdraw 60% of the corpus tax-free and must use the remaining 40% to purchase an annuity, which will provide a monthly pension. To start your retirement, select an annuity plan from an NPS-empanelled insurance provider, and they will handle the disbursements. Ensure to log in to your account to manage the process effectively.
Regards, Nitin Narkhede Founder Prosperity Lifestyle Hub, Free webinar https://bit.ly/PLH-Webinar
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |9731 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 27, 2024

Asked by Anonymous - Mar 19, 2024Hindi
Money
Dear Dev Ashish, I am 51 years old and having Superannuation fund of around 4 Lakhs (giving around 8-9 % retunes). I have option to switch from Superannuation to NPS. Please note I had opened an NPS account where previous organization and I had contributed and am having an investment around 7.17 Lakhs in Tier 1. Thanks!
Ans: Evaluating the Switch from Superannuation Fund to NPS
At 51, you have accumulated a superannuation fund of around Rs. 4 lakhs, providing returns of about 8-9%. You also have an NPS Tier 1 account with a balance of approximately Rs. 7.17 lakhs. Deciding whether to switch from the superannuation fund to the NPS requires careful consideration of several factors.

Understanding Your Current Superannuation Fund
Returns and Stability:

Your superannuation fund provides stable returns between 8-9%. This predictability can be comforting as it ensures a steady growth of your corpus without exposure to market volatility.

Tax Benefits:

Superannuation funds offer tax benefits on contributions and growth. The corpus received at retirement is partially tax-free, which is an advantage.

Liquidity and Withdrawal:

Superannuation funds typically allow for lump-sum withdrawals at retirement, which can be beneficial if you need a significant amount of money at once.

Overview of the National Pension System (NPS)
Higher Potential Returns:

NPS investments are market-linked, offering higher potential returns through exposure to equity, corporate bonds, and government securities. The returns could be higher than superannuation funds over the long term.

Tax Efficiency:

NPS contributions qualify for additional tax benefits under Section 80CCD(1B) of the Income Tax Act, over and above the Rs. 1.5 lakh limit under Section 80C. This can enhance your tax savings.

Annuity and Lump-Sum Options:

Upon maturity at age 60, NPS allows you to withdraw 60% of the corpus tax-free and use the remaining 40% to purchase an annuity. This provides a mix of lump-sum and regular income post-retirement.

Comparing Superannuation Fund and NPS
Risk and Return Profile:

Superannuation Fund: Offers lower but stable returns with minimal risk.
NPS: Potential for higher returns but comes with market-related risks.
Tax Implications:

Superannuation Fund: Partial tax exemption on withdrawal.
NPS: Up to 60% withdrawal tax-free at maturity, additional tax benefits during the contribution phase.
Flexibility and Liquidity:

Superannuation Fund: Allows for lump-sum withdrawals at retirement.
NPS: Provides both lump-sum and annuity options, offering a balance of liquidity and regular income.
Strategic Considerations for Switching
Given your age and financial goals, let's analyze the strategic considerations for switching from your superannuation fund to the NPS.

Evaluating Financial Goals and Risk Tolerance
Time Horizon:

With retirement likely within the next 10-15 years, your investment horizon is relatively short. Balancing growth and stability is crucial.

Risk Appetite:

If you are comfortable with moderate risk for potentially higher returns, the NPS could be a suitable option. If you prefer stability and lower risk, staying with the superannuation fund might be better.

Calculating Expected Returns and Growth
Superannuation Fund:

At 8-9% returns, your Rs. 4 lakhs would grow steadily but modestly compared to NPS.

NPS:

With a balanced allocation to equities, corporate bonds, and government securities, the NPS could potentially offer higher returns. Historical data suggests that a balanced NPS portfolio could yield 10-12% returns over the long term.

Tax Efficiency and Benefits
Superannuation Fund:

Enjoys tax benefits, but the lump-sum withdrawal could be partially taxable.

NPS:

Offers additional tax deductions and a significant portion of the withdrawal is tax-free. This can provide a higher post-tax corpus at retirement.

Recommendations for Optimal Retirement Planning
Based on the analysis, here are some recommendations to help you decide whether to switch from the superannuation fund to the NPS.

Diversifying Your Retirement Portfolio
Maintain a Balanced Approach:

Consider diversifying your retirement corpus by maintaining a portion in both superannuation and NPS. This approach balances stability and growth, reducing overall risk.

Switch Partial Amount to NPS:

You can switch a portion of your superannuation fund to NPS. This way, you benefit from higher potential returns while retaining some stability.

Maximizing Tax Benefits and Returns
Utilize Additional Tax Benefits:

Take advantage of the additional tax deductions under Section 80CCD(1B) by contributing to NPS. This can enhance your tax savings and boost your retirement corpus.

Opt for a Balanced NPS Allocation:

Choose a balanced allocation within NPS, with a mix of equity, corporate bonds, and government securities. This strategy aims for higher returns while managing risk.

Regular Monitoring and Adjustments
Review Performance Periodically:

Regularly review the performance of your NPS investments and make adjustments if necessary. This ensures your portfolio remains aligned with your retirement goals and risk tolerance.

Adjust Allocations Closer to Retirement:

As you approach retirement, gradually shift your NPS allocation towards more conservative investments. This reduces exposure to market volatility and safeguards your corpus.

Practical Steps for Implementation
Consult with a Certified Financial Planner:
Seek professional advice to tailor the strategy to your specific financial situation and goals.

Initiate Partial Transfer to NPS:
If you decide to switch, initiate a partial transfer from your superannuation fund to your existing NPS account.

Set Up Regular Contributions:
Continue contributing regularly to both your superannuation fund (if possible) and NPS to maximize growth and tax benefits.

Monitor and Rebalance:
Periodically review and rebalance your portfolio to ensure it remains aligned with your goals and risk profile.

Conclusion
Switching from a superannuation fund to NPS can offer higher returns and additional tax benefits, but it comes with market-related risks. By maintaining a balanced approach and diversifying your investments, you can achieve a stable and growing retirement corpus. Regular monitoring and adjustments will ensure your portfolio remains on track to meet your retirement goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9731 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 07, 2025

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I was a contributor to superannuation scheme (from LIC) of my company for many years. Last year the company gave option to transfer the collected funds to NPS. I opted for the same and the transfer has been done. But I retired (60 yrs) before the transfer could be completed. The money has been in NPS for 2 months. Can I withdraw 60% as lumpsum from NPS now?
Ans: Your NPS Transfer from Superannuation: Key Points
You contributed to a Superannuation Scheme for many years through your company.

Last year, the company allowed one-time transfer of this corpus to NPS.

You opted in. But you retired before the transfer was processed.

Now, the superannuation money has landed in NPS, just 2 months ago.

You are now over 60 years and want to withdraw 60% lumpsum from NPS.

Basic Withdrawal Rule at Age 60 in NPS
Once you turn 60 years, you are allowed to withdraw up to 60% as lumpsum.

The remaining 40% must be used to buy annuity from an IRDA-approved insurer.

The withdrawal request must be made through CRA (Central Recordkeeping Agency) portal.

This withdrawal can be done even if contributions are only for a short period, like in your case.

Unique Situation in Your Case: Transfer After Retirement
Let’s examine a few things that make your case unique.

You had already retired before the NPS transfer was completed.

But the transfer itself was valid, and now the money is with NPS.

You are now a subscriber above 60 years with corpus already in Tier-I account.

This means you can initiate withdrawal as per NPS exit rules.

PFRDA Rules Allow This Withdrawal
As per the PFRDA guidelines, the following conditions apply:

Subscribers aged 60 or more can initiate exit anytime after retirement.

Minimum NPS contribution duration not mandatory for corporate-to-NPS transfers.

Since the transferred corpus is now inside NPS, you are treated as a retired subscriber.

You are eligible to withdraw 60% tax-free, and use 40% for annuity purchase.

Steps to Initiate Withdrawal from NPS
You can now begin the formal withdrawal process:

Login to https://cra-nsdl.com or https://enps.nsdl.com using PRAN.

Choose the “Exit from NPS” option.

Provide bank details, identity proof, and annuity option details.

Upload a cancelled cheque and photograph.

If help is needed, contact your PoP (Point of Presence) or nodal office.

You can also go through your former employer if they facilitated the NPS setup.

Tax Benefit on Withdrawal
The 60% you withdraw as lumpsum is completely tax-free.

The remaining 40%, when used to buy annuity, will be taxable as pension income.

The monthly pension received from annuity is added to your taxable income every year.

Caution on Annuity Choice
Choose annuity type wisely. Options include return of purchase price, joint annuity, etc.

Avoid choosing lowest premium. Focus on steady and safe pension.

You may compare annuity options on https://www.npstrust.org.in/annuity-service-providers.

Finally
Yes, you can withdraw 60% lumpsum from NPS even if it was a superannuation transfer.

Retirement before transfer is not a disqualification. The key is, money is now in NPS.

Follow the exit process and choose your annuity option with care.

Since this is a one-time decision, you may take help from a Certified Financial Planner.

Best Regards,
?
K. Ramalingam, MBA, CFP,
?
Chief Financial Planner,
?
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |9731 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 15, 2025

Asked by Anonymous - Jul 15, 2025Hindi
Money
Im 43 with 1 lac in hand investing 15k in sip from last 5monts monthly expenses are 70K excluding SIP. Plan to buy a house which will cost 2cr. How do i go about and how much should i have by retirement and how do i make that money with the house buying plan etc
Ans: ? Current Financial Snapshot

– You are 43 years old. That gives around 15–17 years to build wealth.
– You have Rs.1 lakh in hand as lump sum.
– You are investing Rs.15,000 monthly through SIPs for 5 months.
– Your household expenses are Rs.70,000 monthly. SIP is not included in this amount.
– You plan to buy a house worth Rs.2 crore.
– You also want to plan for your retirement.

This is a good step. You are already disciplined with SIPs. Keep it up.

Let us now look at each goal deeply.

? House Purchase Plan of Rs.2 Crore

– Buying a Rs.2 crore house is a big decision.
– It will need a careful and strategic financial preparation.
– A typical home loan can go up to 75% to 80% of the house value.
– That means, minimum Rs.40 lakh as down payment is required.
– You will also need Rs.10–15 lakh for registration and interiors.
– So your total own fund requirement is around Rs.50–55 lakh.

Now let’s look at how you can reach that amount.

– You are already doing SIP of Rs.15,000 per month.
– If you increase it slowly over time, the corpus will grow faster.
– But SIP alone may not be enough for such a big goal in short time.
– You may need to consider a combination of savings, bonuses, and planned borrowings.
– Avoid using retirement funds for house purchase. Keep goals separate.
– Also, don’t delay too much, as property prices and costs may rise.

A Certified Financial Planner can help you do a home-buying readiness check.

? Loan Readiness and EMI Impact

– A Rs.1.5 crore loan for 20 years can have EMI near Rs.1.3 lakh.
– But your current monthly surplus is not enough to support that EMI.
– Your current monthly expense is Rs.70,000. SIP is Rs.15,000.
– So, total outgoing is Rs.85,000.
– Unless your income increases significantly, EMI pressure will be high.

Here's what you can do:

– Delay home purchase by few years and save aggressively till then.
– Build Rs.50–60 lakh for down payment and reduce loan amount.
– This will make EMI manageable and reduce interest burden.
– Keep EMIs within 40–45% of your income for comfort.
– Factor in property tax, maintenance, and insurance.

Be cautious. Don’t compromise on long-term wealth for short-term ownership.

? Retirement Planning Assessment

– You have about 17 years left for retirement.
– Monthly expense now is Rs.70,000. At 6% inflation, it may be Rs.2 lakh+ at retirement.
– So, you must create a good-sized retirement corpus.
– It must support you for 25–30 years post-retirement.
– Even without medical emergencies, retirement life needs a big corpus.

Here’s what you can do:

– Continue SIP of Rs.15,000. Increase it by 10% every year.
– Make retirement your primary goal. Home can wait a few years.
– Use mutual funds for long-term wealth creation.
– Choose diversified, actively managed funds for long-term growth.

Please avoid index funds. Index funds lack active risk control.
They follow the market. They don’t beat it.
They don’t have downside protection in falling markets.
An actively managed fund is handled by a skilled fund manager.
He/she can shift allocations based on market signals.
This brings better growth and lower risk over long term.

Also, don’t pick direct mutual funds on your own.
Direct plans may look cheaper. But they lack expert guidance.
Wrong fund selection can reduce long-term returns.
When you invest through a CFP and MFD in regular plans, you get:
– Right fund choices
– Periodic review
– Rebalancing help
– Goal alignment

That value is bigger than small cost difference.

? Protection and Emergency Fund Planning

– You didn’t mention insurance or emergency fund.
– That’s a major missing block in your financial plan.
– You must have term life cover of at least 15–20 times your income.
– Health insurance for all family members is a must.
– Also create emergency fund of 6–9 months of expenses.

This gives peace of mind and avoids breaking investments in crisis.

Buy pure term insurance. No ULIP or combo plans.
If you have LIC or ULIP plans, consider surrendering them.
Reinvest the surrender value into mutual funds.
Traditional policies give low returns. ULIPs have high charges.
They are not suitable for wealth creation.

? Expense and Budget Optimisation

– Monthly expenses of Rs.70,000 are reasonable if you earn well.
– But try to save at least 25–30% of income regularly.
– Create a smart monthly budget.
– Cut unnecessary spends.
– Avoid EMIs for lifestyle expenses.
– Increase SIPs every year as income grows.
– Avoid withdrawing from mutual funds for small needs.

Use every bonus or windfall to boost your SIP or emergency fund.

? Tax Planning Angle

– You must use tax-saving options smartly.
– ELSS mutual funds can save tax under 80C and grow your wealth.
– Avoid locking money in PPF, NSC, or traditional LIC policies.
– Invest in tax-saving instruments with long-term growth.

Know the latest mutual fund taxation:

– LTCG on equity funds above Rs.1.25 lakh taxed at 12.5%.
– STCG on equity taxed at 20%.
– Debt funds taxed as per your income slab.

Plan your withdrawals wisely to reduce tax.

? Children's Future and Other Goals

– You didn’t mention children. If you have kids, plan for their education too.
– Create separate funds for each goal. Don’t mix.
– A child's higher education cost can be Rs.50–80 lakh in future.
– Start early with SIPs in long-term funds.

That way, your goals won’t collide. And your retirement won’t suffer.

? Asset Allocation Planning

– Right mix of assets is key for wealth creation.
– For your age and goals, equity should be 60–70%.
– Balance in debt and liquid funds for short-term and emergency needs.
– Avoid gold, real estate, or FDs for long-term growth.
– Real estate locks money. Has high entry-exit costs.
– FDs don’t beat inflation after tax.

Your asset mix must change as you near retirement.
Shift gradually from high risk to safety.
A CFP can guide you with regular reviews.

? Monthly Action Plan

– Track income, expense, and surplus monthly.
– Increase SIP by 10% every year.
– Build Rs.5–10 lakh emergency fund in liquid funds.
– Review term and health insurance.
– Avoid new loans till home loan starts.
– Don’t stop SIPs for short-term purchases.
– Invest bonuses in lump sum into mutual funds.
– Use regular plans through an MFD backed by CFP.

This monthly habit creates solid financial discipline.

? What You Should Not Do

– Don’t rush to buy property now with low savings.
– Don’t break mutual fund SIPs to pay EMIs.
– Don’t depend on employer-provided health cover only.
– Don’t invest in index funds. They have no active control or judgement.
– Don’t invest in direct mutual funds without a qualified guide.
– Don’t rely on LIC policies or endowments for wealth building.
– Don’t skip emergency fund or insurance.

These mistakes can hurt long-term financial freedom.

? Finally

– You have taken the right steps by starting SIP and planning early.
– Be consistent, and review yearly with a CFP.
– Prioritise retirement. House can be managed with better preparation.
– Keep personal finance simple and goal-driven.
– Long-term discipline brings big rewards.
– Don’t chase short-term returns or risky trends.

Money is a tool, not a goal. Use it wisely. Build peace, not just assets.

Wishing you a safe, smart, and strong financial future.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Nayagam P

Nayagam P P  |8821 Answers  |Ask -

Career Counsellor - Answered on Jul 15, 2025

Asked by Anonymous - Jul 15, 2025Hindi
Career
I am a student from odisha. I have scored 94.45%ile in jee mains and i am unsure what i can get with this score. I was alloted in NIFTEM Thanjavur through josaa and got CSE in VSSUT BURLA. Should i wait for CSAB round or go with any of these ?
Ans: With a 94.45 percentile in JEE Main representing an all-India rank near 120 000–140 000, your son’s current allotments—B.Tech at NIFTEM Thanjavur and CSE at VSSUT Burla—offer credible pathways. NIFTEM Thanjavur’s B.Tech reports a 66.7% placement rate with a median package of ?3.65 LPA over the past three years, backed by its Institute of National Importance status, specialized food-processing labs, and industry linkages. VSSUT Burla’s CSE achieves a 70–75% placement consistency, average packages between ?4–6 LPA, modern computing infrastructure, and strong core-engineering recruiter engagement. CSAB rounds for CSE at NITs and IIITs typically close by ranks below 40 000 for low-tier NITs and under 55 000 for IIITs, rendering admission through CSAB unlikely given your son’s rank. Alternatives include accepting one of the existing seats or pursuing lateral-entry diploma-to-degree options in premier institutes if CSAB options fail.

Recommendation: Accept the VSSUT Burla CSE seat to leverage its higher placement rate, dedicated computing facilities and Odisha domicile advantage; reserve NIFTEM Thanjavur as a strong fallback in agro-technology; bypass CSAB for CSE given low probability, and explore lateral-entry engineering pathways for greater flexibility. All the BEST for Admission & a Prosperous Future!

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Nayagam P

Nayagam P P  |8821 Answers  |Ask -

Career Counsellor - Answered on Jul 15, 2025

Asked by Anonymous - Jul 15, 2025Hindi
Career
Sir my son with a ranking of 24294 In the 2b category Which engineering colleges are possible and best in cs in the first five preference order Our residence is Bangalore sir Kindly guide
Ans: (I assumed your son appeared for KCET Exam). With a KCET rank of 24 294 in the 2BG category, your son has certain admission to the CSE branch at several reputable Bangalore institutes whose 2024 closing ranks exceeded this mark. All listed colleges are AICTE-approved, NBA/NAAC-accredited, feature modern computing and AI/ML labs, experienced faculty, strong industry tie-ups and placement cells recording 70–85% branch-wise placement consistency over the past three years. Global Academy of Technology, Rajarajeshwari Nagar, Bangalore. East West Institute of Technology, BEL Layout, Bangalore. CMR Institute of Technology, Varthur, Bangalore. RNS Institute of Technology, Bangalore. New Horizon College of Engineering, Marathahalli, Bangalore. Presidency University, Bangalore. Impact College of Engineering & Applied Sciences, Sahakar Nagar, Bangalore. REVA University, Yelahanka, Bangalore. Acharya Institute of Technology, Soladevanahalli, Bangalore. Atria Institute of Technology, Hebbal, Bangalore.

Recommendation: Global Academy of Technology, Rajarajeshwari Nagar, Bangalore offers the most balanced combination of modern AI/ML infrastructure and placement consistency. CMR Institute of Technology, Varthur, Bangalore stands out for its focused CSE curriculum and strong local industry ties. East West Institute of Technology, BEL Layout, Bangalore provides reliable admissions, robust labs and steady recruiter engagement. All the BEST for Admission & a Prosperous Future!

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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