The National Pension System (NPS) is a retirement scheme that's easy to invest in and offers tax benefits. Both you and your employer can contribute to building a fund for your retirement, providing social security.

Under NPS, your account operates on a defined contribution basis. You contribute until you turn 60, but you can continue investing until you're 75. However, the maturity amount depends on how well the underlying assets, like stocks and bonds, perform.

Your contributions, investment returns, and fees deducted all influence your eventual pension wealth. To build a substantial corpus, you need to make significant contributions and invest for a long period.

Experts advise that higher investments and longer accumulation periods increase the chances of building a good pension corpus. NPS invests in stocks, bonds, and alternative funds, and you can claim tax deductions under Section 80CCE and 80CCD (1B).

Following are the Changes in NPS rules

Final withdrawals - At 60, you can withdraw 60% of your NPS corpus tax-free. The remaining 40% must be used to buy an annuity plan, with annuity payouts taxed based on your income slab.

Equity allocation - The maximum equity allocation limit is now 75%, and tapering of equity exposure is optional until age 60.

Tier 2 NPS account - Offers flexible savings and withdrawal options compared to the Tier 1 retirement account.

Systematic Lump Sum Withdrawal - Introduced in October 2023, allowing systematic withdrawals.

Allotment of units at the same-day NAV - Through the D-Remit facility, investments made before 9:30 a.m. are processed on the same day, optimising returns.

These changes aim to make NPS more flexible and beneficial for subscribers, helping them plan for retirement with ease and efficiency.