u/Fit-Map6277

A work colleague of mine is nearing his 50s. He is looking for an early retirement (in the next 1-2 years) and currently holds ~10L in NPS Tier 1. Now, I am not a big fan of NPS and I have already made some comments on reddit about it. But, for someone nearing retirement with not a sizeable contribution to NPS made me tell him that it does not make sense for him to continue contributing to NPS Tier 1. Primarily because:

1. His corpus will not be "sizeable" by the time he retires. He is in the highest tax slab
2. 80% of Tier 1 corpus can be withdrawn with 60% tax exempt + 20% taxable. This will be around 8L
3. 20% of the remaining Tier 1 corpus will have to be converted to annuity. Now, a 2L contribution to annuity will give hardly any monthly payoff. Maybe good enough to pay off the broadband bill.

So, I was quite emphatic that it doesn't make sense to contribute to NPS. But, I wanted a second opinion.
I myself am confused about NPS although I have considerable working tenure ahead of me.