The first job always feels like a new chapter in life and one often does not think of retirement at the time. It is, however, better if one starts to take small steps toward it by investing. The key benefit of starting early is compounding, and your investments grow exponentially over time.
For post-retirement safety, one must start investing in NPS early as it gives more time to money to grow. Even a small monthly contribution can grow significantly over decades. In addition to this one also enjoys tax benefits under Section 80CCD(1B), saving up to Rs 50,000 annually.
If one is uncertain about how to distribute their investments, they should choose the auto option, which adjusts according to age. Younger investors receive a higher equity allocation, and as they grow older, distribution gradually moves to safer assets such as government bonds.
For hands-on control, active choice is the option. In it, one can invest in equity (E), corporate debt (C), and government bonds (G).
NPS provides several fund managers. Evaluate their historical performance, reliability, and service quality before making a choice. It's similar to selecting a reliable coach to guide investments.
One should begin with modest contributions and gradually raise them as income rises. Monitor performance and reassess asset allocation annually. The NPS has a long lock-in period, generally restricting withdrawals until the age of 60. Keep this in mind before investing.
Compiled by Syed Muskan
