The year 2025 was significant for NPS investors in many ways. During this period, the government paid special attention to retirement planning. Let’s take a look at some of the major changes that took place this year…
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Year Ender 2025: The year 2025 was significant for investors in the National Pension System (NPS) in many ways. During this period, the government paid special attention to retirement planning, so that people could choose more reliable and better options for their future.
This year, the government and pension fund regulator PFRDA made several important changes to the NPS, aimed at making the scheme more secure and flexible. Let’s explore some of the key changes made this year…
1. Opportunity to invest 100% in equity in NPS
The government has allowed private sector employees and investors to invest 100% of their new NPS deposits in equity starting October 1, 2025. Previously, this limit was 75%.
Investing in 100% equity is ideal for investors seeking high long-term returns and willing to take higher risks.
2. Changes in Retirement Withdrawal Rules
The rules for withdrawing funds from NPS upon retirement have been simplified. Previously, at least 40% of the total corpus was required to be invested in annuity. Under the new rules, this limit has been reduced to 20% in many cases.
This means that investors can now withdraw up to 80% of their deposits either in one go or in installments, making it easier to plan for their post-retirement finances.
3. New Investment Options for Central Government Employees
The government has added new investment options to the NPS for central government employees. Employees can now choose from LC75 and Balanced Life Cycle Funds. In this scheme, equity risk reduces with age, making the investment more secure by the time of retirement.
4. Initiative to Link Gig Workers to NPS
The government has launched an initiative to link gig workers employed in various companies to the NPS, so that those working in the unorganized sector can also receive financial security upon retirement.
5. More Flexibility at the Time of Exit
According to the new rules, up to 80% of the corpus can now be withdrawn upon exit from the NPS. Under certain circumstances, investors are also permitted to withdraw the entire 100% corpus, providing greater flexibility in the use of funds at the time of retirement.
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