NPS Withdrawal (SLW)+ Monthly Pension: Can your Rs 2 crore corpus earn you Rs 3.4 crore in 15 years? See expert calculations to know it

People who don't want to withdraw their lump sum corpus in one go can opt for Systematic Lump Sum Withdrawal (SLW) plan. It is equal to a Systematic Withdrawal Plan (SLW) in a mutual fund where an investor invests a lump sum amount, gets return on that, and withdraws a monthly amount. 

While an NPS subscriber will keep getting taxable monthly pension from the annuity plan of their choice, they will get extra tax-free income through SLW. The good part is that both will keep getting returns on both investments. 

SLW offers monthly, quarterly, half-yearly, and yearly withdrawals.

As per Max Life Pension Fund Management, SLW or lumpsum withdrawal is completely the choice of a subscriber. It can be based as per the financial need at the time of retirement.

If there is a need for lump sum money, one can withdraw 60 per cent of NPS corpus tax-free.
Combination of SLW and immediate annuity can be an efficient strategy for the following reasons:
Larger income- While exercising the SLW option, you stay invested in the market for a longer time, which is an opportunity to create larger wealth.
Predictable income post-retirement: While choosing an immediate annuity from 40 per cent of the balanced NPS corpus helps in guaranteed payouts for life long at rates that are locked in today; hence, it shields from reinvestment risk.
The annuity payout amount can be invested further to generate further wealth, while SLW ensures regular income.

Max Life Pension Fund Management says everyone can choose SLW. On retirement, people get money in lump sum from PF, gratuity, and other employment benefits, which fulfil the immediate corpus requirements. So we can utilise the 60 per cent of NPS corpus to get payout in a phased or staggered manner rather than lumpsum by the way of SLW.

In SLW we keep the money invested in the market, which exposes it to market fluctuations, which helps in generating higher returns. However, on the downside, there is a tenure restriction with the SLW option, i.e., you can stay invested till the age of 75 years, which limits the opportunity for wealth creation given the cycles of the market.

Age-based - In this option, one can select the age up to which SLW is required with the maximum age limit being an individual attaining the age of 75 years.

Amount-based - In this option, one can select the amount of withdrawal as per the desired frequency till the age of 75 years.

Suppose a person has a Rs 2 crore corpus at 60 years of age. They purchase annuity with 40 per cent, and for the rest, Rs 1.20 crore, they start SLW. By the age of 75, how much amount will they withdraw?