Can NPS subscribers withdraw at will after age 60 or after 15 years (normal exit)?

Published on / By M. Pattabiraman Twitter: @pattufreefincal

Published: January 30, 2026 at 6:00 am

Last Updated on May 20, 2026 at 6:45 pm

After the mandatory NPS annuity was reduced to 20% in Dec 2025, I discussed two additional changes I would like to see in the NPS.

(1) The inclusion of the RBI Retail Direct Portal as an annuity provider and (2) A short-term debt fund option for retirees. See: My NPS Wishlist: two changes to make it more user-friendly. As I wrote this, I felt I was missing out on something.

Note: The following is based on my understanding of the current rules. It is entirely possible that my understanding is wrong. If so, please show me the relevant sentences in the circulars, and I will be more than happy to correct myself and give you credit.

It just hit me. What happens after you reach age 60 or have been a NPS subscriber for 15 years? Please note: The 15-year exit rule does not apply to corporate NPS.

🔥Secure your future with our Robo-advisory tool trusted by over 3,500 investors and advisors. From effortless retirement planning to funding your children’s biggest dreams,  turn your financial goals into reality. 🔥

Subscribe for money management solutions via email! (Link takes you to our email sign-up form) Join 32,000+ readers in our community.

  • You buy the annuity for 20% and pull out 80% of the accumulated pension wealth (APW) immediately.
  • You defer the annuity purchase (up to age 85) and pull out 80% immediately
  • You buy the annuity immediately and defer the lump sum payout (up to age 85)
  • You defer both (up to age 85)
  • You buy the annuity immediately or defer it. You can opt for systematic lump sum withdrawal (SLW) up to the age of 85.
  • You can continue investing in the NPS (up to age 85), buy the annuity, and withdraw later. (If you defer, you do not have to invest; if you “continue”, you must keep your account active by investing.

While all these possibilities are beneficial, I do not see in the rules the right to withdraw at will. That is, after staying in the NPS for 15 years (in case of all-citizen subscribers) or reaching 60, I must have the freedom to withdraw the lump-sum portion of the pension wealth at will.

As per the present rules, I must either

(a) continued to stay subscribed to the NPS or

(b) Withdraw the full lump sum part, defer its full withdrawal, or set up an SLW.

There is no option for me to withdraw at will without restrictions. If I continue making contributions, the withdrawal rules before age 60 apply. I cannot stay in the NPS without contributions and withdraw at will. If I do not contribute, I must either get it all out at once, set up an SLW or defer complete withdrawal to a future date (up to age 85). If I can cancel the SLW or the newly introduced Retirement Income Schemes (with asset allocation glide paths), then the balance corpus will be redeemed and sent to us.

This lack of liquidity after the subscriber is eligible for a normal exit seems unfair to me and must change. I must be able to keep my NPS account active with contributions, buy the annuity at will until age 85 and also with any amount at will until age 85. This freedom does not exist at present, as far as I understand. If I am mistaken, please contact me. I shall be happy to correct the article with the relevant sections of the rules with a credit to you.