“What’s the point of receiving a pension of just a few hundred rupees a month?” an acquaintance asked me recently. We were discussing the Pension Fund Regulatory and Development Authority’s (PFRDA) revised exit rules for the National Pension System (NPS).It is a fair question. At a certain age, you begin to simplify life. Activities reduce, commitments turn fewer, unnecessary work is quietly dropped and somehow the little glass figurines in the showcase disappear as well!Investments get streamlined, portfolios are consolidated, scattered mutual fund folios are merged and the lone fixed deposit in a distant bank is redeemed. The objective is not merely to maximise returns but to make life simpler. For some people, an NPS account now falls into that category.This is not true for everyone. But if you shifted to the new tax regime and no longer receive additional tax deductions for NPS contributions and accumulate only a modest corpus, it may be time to review if continuing the account still serves financial goals. Why discuss NPS in an insurance column? Because the NPS endgame is the purchase of an annuity, viz., a pension product offered by life insurers. And why now? Because the revised PFRDA rules have made it easier for some subscribers to exit.Changing equationIf the NPS corpus is up to ₹8 lakh, you can withdraw the full amount without purchasing an annuity. Earlier, part of the corpus had to be compulsorily used to buy one. For many investors, that changes the equation.An annuity has its place. It provides an income for life, something few financial products can promise. But if the corpus is small, the pension it generates is likely to be modest. A corpus of about ₹8 lakh may translate into an annual pension of roughly ₹5,000, depending on age and option chosen. Some investors may decide they would rather deploy the money elsewhere.Large corpus, more choicesIf your corpus is larger, you have more choices. You can continue with NPS, defer exit, withdraw a part of the corpus and use the balance to buy an annuity or simply keep the account without making fresh contributions. The right answer depends on overall retirement income, not NPS alone.Advantage of buying an annuityThere is another point worth remembering. Buying an annuity via NPS has one important advantage: there is no GST on the purchase. Your entire amount goes towards buying the pension. Outside NPS, GST is payable. Depending on corpus size, this benefit can be meaningful.The new rules are therefore not an invitation to exit NPS. They are an opportunity to rethink it. Retirement planning is not only about accumulating investments. It is also about knowing when to simplify them. If your NPS account has become a small holding that no longer offers tax benefits and adds little to your retirement income, this may be the right time to decide whether it still deserves a place in your portfolio.(The writer is a business journalist specialising in insurance & corporate history.)Published on August 9, 2026