Save for your retirement with NPS

Retirement is one of the few financial goals you can’t postpone. But it’s also the one most people delay thinking about.

There’s always something more immediate: a house, EMIs, a vacation, or that one stock you’re sure will double. Retirement keeps getting pushed to “next year.” And yet, it’s the one goal where time matters the most.

Most people look at NPS as a tax-saving product. The conversation starts there and ends there. That’s a narrow way to look at it.

NPS is a market-linked retirement product built for long-term investing. It offers flexibility that most traditional retirement products don’t, you can choose across asset classes (equity, corporate bonds, government securities, and alternatives), pick and switch fund managers, and keep the same account across jobs and cities.

The tax benefits are real, but they need to be understood correctly.

Under the old tax regime: Your contributions qualify under Section 80CCD(1), which falls within the overall 80C limit of ₹1.5 lakh. On top of that, Section 80CCD(1B) gives you an additional ₹50,000 deduction; this is over and above 80C, not part of it.

If your employer offers a corporate NPS: Employer contributions are deductible under Section 80CCD(2), up to 10% of basic + DA under the old regime and up to 14% under the new regime. This works under both tax regimes, making it one of the few deductions that survived the shift to the new regime.

But NPS isn’t just about saving tax in March. The product itself has changed a lot in recent years, and many of the reasons people avoided it earlier no longer hold.

Exit rules are now more flexible: If your corpus at retirement is up to ₹8 lakh, you can withdraw the entire amount. For larger amounts, you take a lump sum and use the rest to buy an annuity. The December 2025 changes increased the lump sum withdrawal limit from 60% to 80% of the corpus.

Another important change is around liquidity. Earlier, NPS was tightly locked in until age 60, which was a major concern for many investors. Recent updates now allow exits after 15 years under certain conditions.

You can stay invested longer: Subscribers can now continue in NPS until 75, with recent changes allowing extensions up to 85 in certain cases. More time means more compounding.

Higher equity exposure is possible: Under the newer MSF (Multiple Scheme Framework), non-government subscribers can go up to 100% equity allocation. Earlier, the cap was 75%. If you’re young and have decades ahead of you, this meaningfully changes return potential.

You don’t have to exit all at once: The Systematic Lump Sum Withdrawal (SLW) facility lets you take phased withdrawals instead of withdrawing everything at 60. This makes post-retirement cash flow management simpler.

Your kids can start early: NPS Vatsalya, launched in 2024, lets parents open NPS accounts for minor children. The account converts to a regular NPS when the child turns 18. Starting early is one of the most powerful advantages in retirement investing, and this makes it possible from day one.

Individually, these are small changes. But they address most of the reasons people avoided NPS earlier: rigidity, lack of control, and limited exit options.

And the problem NPS is trying to solve isn’t getting smaller. India is moving toward a system where retirement is increasingly your own responsibility. A large part of the workforce is informal, traditional pension coverage is limited, and family structures are changing. People are living longer, which means retirement can stretch over 25–30 years, not 10.

NPS alone isn’t a complete retirement plan. But it’s one of the few products in India that is genuinely low-cost (fund management fees of 0.03%–0.09%, lower than even the cheapest index funds), portable, and designed specifically for long-term retirement saving.

You can invest in NPS on Coin.

Tax benefits are subject to conditions under the Income Tax Act. Consult a tax advisor for your specific situation.