National Payment System (NPS): Earning Rs 6 lakh/year? You may need Rs 5.19 crore corpus! Watch this

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Senior couple walking in park.
NPS: You should also understand that the amount of money you would need for living after retirement will be way higher than what you need today.



National Payment System (NPS): It is important to start retirement planning as early as possible. You should also understand that the amount of money you would need for living after retirement will be way higher than what you need today. This is simply because the value of money decreases over time because of inflation, which pushes up the amount required to meet expenses.

In other words, what you can buy for Rs 100 today, may cost you over Rs 200, say after 10-15 years.

In economics terminology, your purchasing power decreases over time as the value of money also goes down.

An estimate by PFRDA suggests (watch video), if a 30-year-old man requires Rs 6 lakh per annum to meet his expenses today, he would need Rs 25.93 lakh per annum to meet the same expenses after retirement (adjusting with inflation @5%). To maintain the same level of expenses, he would need Rs 25.93 crore x20 = Rs 5.19 crore corpus!

Retirement is one of the most long-term goals requiring early planning.



NPS is one of the government schemes to ensure a steady flow of money post-retirement. It is easily accessible, low cost, tax-efficient, flexible and portable retirement savings account.

Any Indian citizen, including NRIs, between 18-50 years of age can join the NPS. They can join as an individual or an as an employee-employer group (s).

Watch this explainer video by PFRDA



You can open an NPS account at any authorised outlet

(Checklist here: https://www.npscra.nsdl.co.in/pop-sp.php).

The funds contributed by subscribers to NPS are invested by  PFRDA registered Pension Fund Managers (PFM’s) as per the investment guidelines provided by PFRDA.

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