Now you can make your NPS go the distance

The National Pension System (NPS) has long been a valued retirement savings option for Indians, offering market-linked returns and tax benefits.

The Pension Fund Regulatory and Development Authority (PFRDA) has introduced the Systematic Lumpsum Withdrawal (SLW) facility, adding a flexible and adaptable withdrawal option for retirees.

Know the details of SLW, its benefits, and how it can impact your retirement planning.


What is SLW?

Earlier, NPS subscribers could withdraw 60% of their corpus on retirement as a tax-free lump sum and utilize the remaining 40% for an annuity (pension).

The SLW facility transforms this lump sum withdrawal by allowing you to receive it in phased installments over a period ranging from 5 to 10 years.

This option is similar to the Systematic Withdrawal Plan (SWP) offered in mutual funds, providing you with a regular income stream and greater control over your post-retirement finances.


Key Features of SLW:

  • Eligibility: Available to NPS subscribers upon retirement.
  • Withdrawal Amount: Up to 60% of the lump sum portion (maximum 60% of total corpus).
  • Frequency: Choose monthly, quarterly, half-yearly, or yearly withdrawals.
  • Duration: Select a withdrawal period between 5 and 10 years.
  • Taxation: Up to 40% of the total corpus remains tax-exempt; clarity on SLW-specific taxation is awaited.
  • Investment: Remaining corpus continues to earn market-linked returns in the chosen NPS scheme.


  • Regular Income: Ensures a predictable and reliable cash flow throughout your retirement, aiding in budgeting and expense management.
  • Increased Monthly Income: Combines annuity income with SLW withdrawals, potentially boosting your monthly income significantly.
  • Wealth Creation: While withdrawing a portion, the remaining corpus continues to accrue returns, fostering long-term wealth creation.
  • Taxation: SLW withdrawals within the 60% limit could remain tax-exempt, enhancing its financial appeal.
  • Flexibility: Choose withdrawal frequency and duration to align with your specific needs and financial goals.


How to opt for SLW:

1.      On retirement, submit an application to your nodal office with desired withdrawal details (frequency, amount, duration).

2.    Await approval and commencement of phased withdrawals. 


Choosing SLW: Considerations and Alternatives

While SLW offers substantial benefits, it's crucial to consider your circumstances:

  • Tax Impact: While experts predict tax benefits, await official clarification before making decisions.
  • Risk Tolerance: Market-linked returns involve inherent risks; assess your risk appetite before choosing SLW.
  • Alternative Options: Consider deferring withdrawals, continuing investments, or opting for the total lump sum depending on your needs.


Personal finance planners see SLW as a tool for greater financial flexibility and empowerment for retirees.

It provides a valuable tool for managing finances by staggering withdrawals and planning for specific needs.


By providing control, flexibility, and potentially tax-efficient phased withdrawals, SLW offers retirees the option to tailor their income stream and navigate retirement with greater security and financial stability.


Carefully assess your needs, risk tolerance, and financial goals before deciding if SLW fits your retirement journey.

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