NPS is more flexible now
Recent PFRDA changes have made NPS less rigid and more aligned with real retirement needs, especially for non-government employees.
What experts are saying
Ajay Kumar Yadav, CFPCM, Group CEO & CIO, Wise Finserv Private Wealth, says recent NPS reforms have quietly reshaped the product by improving flexibility, withdrawals, and investment choices.
Arjun Guha Thakurta, Executive Director, Anand Rathi Wealth, notes that while NPS is improving, investors must still weigh lock-in and tax rules carefully.
Multiple Scheme Framework is a big plus
You can now invest in more than one scheme within the same NPS account, helping balance growth and safety better over time.
Better asset separation
Long-term growth money (equity-heavy) can be kept separate from safer allocations as you approach retirement.
Higher equity exposure possible
Under active choice, equity exposure can go up to 100%. This suits young investors with a long investment horizon and risk appetite.
Exit rules are more practical
At retirement, up to 80% of the corpus can be withdrawn (subject to rules), reducing forced annuity dependence.
Structured withdrawals add comfort
Phased and planned withdrawals make post-retirement income planning smoother and more efficient.
Partial withdrawals are easier
Liquidity during working years has improved, making NPS slightly less restrictive than before.
Still comes with lock-in and tax rules
NPS remains a long-term product with limited liquidity and specific tax treatment—these need careful evaluation.
Best as a portfolio component, not a replacement
NPS works well alongside equity mutual funds, not instead of them. Allocate thoughtfully based on goals, lock-in comfort, and tax planning.