Why Your First Paycheck Should Also Fund Your Last: Subhasis Ghosh on Starting Early with NPS
Financial experts are urging a rethink in a country where retirement planning often takes a backseat to short-term goals. In the first episode of "NPS Made Simple: Your Pension Partner for Life", Subhasis Ghosh, CEO of Kotak Pension Fund, sits down with Mint to explain why even 24-year-olds just entering the workforce should start planning for retirement—right now.
Q: Raj, 24, just landed his first big job. He's excited, but isn't retirement planning a little premature at that age?
Not at all. That's the best time to start. The power of compounding works in your favor when you begin early. Investing ₹ 1,000 a year can lead to a substantial retirement corpus over time. It's not about how much you save initially—it's about starting the habit.
Q: But what exactly is the National Pension System (NPS)? How does it work?
It's a government-regulated voluntary retirement savings scheme. You contribute regularly, and the money is invested in a mix of equity, corporate bonds, and government securities. It's market-linked, professionally managed, and low-cost—making it ideal for long-term wealth creation.
Q: So, is it a government scheme or a private one?
It's regulated by the Pension Fund Regulatory and Development Authority (PFRDA), but managed by private players like us. You get to choose your Pension Fund Manager and even switch once a year. It's your money, your call.
Q: How does NPS compare with other investment options like mutual funds or fixed deposits?
The objective is different. NPS is designed specifically for retirement, with features like annuity options and partial withdrawal restrictions to encourage long-term saving. It's also more cost-effective than most mutual funds and offers better returns than fixed deposits, historically.
Q: Speaking of returns, can NPS beat inflation?
Yes. Despite market fluctuations, NPS has delivered around 10.5% CAGR over the past 10 years. That's well above the average inflation rate. Of course, you need to stay invested long term to fully benefit.
Q: And what if someone wants flexibility in contributions?
That's the beauty of NPS—you can invest as little as ₹ 1,000 per year. Contribute more when you can, less when things are tight. But just don't skip entirely. The discipline matters.
Takeaway:
Starting early—even with small amounts—can create a powerful retirement cushion. As Ghosh puts it, 'Retirement planning isn't age-bound. It's intention-bound.'
Watch Episode 1 now to learn why your 20s are the perfect time to start securing your future.
[Link to Episode]
Note to the Reader: This article is part of Mint's paid consumer connect initiative and is independently created by the brand. Mint assumes no editorial responsibility for the content, including its accuracy, completeness, or any errors or omissions. Readers are advised to verify all information independently.
First Published: 26 Apr 2025, 11:32 PM IST
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Make sure to evaluate your current savings, assess your post-retirement needs and risk tolerance to make the right choice.'In case of early demise of the subscriber, pension payout to spouse under the UPS falls to 60% of the guaranteed sum. If the spouse also dies, the pension stops altogether.'FOUNDER, payout can reduce under three conditions
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The original reciprocal tariffs were never meant to stay high, they were a way to get attention and bring countries to the table, which worked. We have already seen reductions and deals like the one with UK are a start, with others in progress. The US holds a strong negotiating position, as it is the world's largest market and a key destination for global exports. While India is less export-dependent, the leverage still matters. Ideally, we will see a positive outcome: slightly higher US tariffs, but lower ones elsewhere. We will have to wait and see how it plays out. Also read: Andy Mukherjee: Importers hit by Trump tariffs could turn to 'glocal banks' With tensions easing, do you think the expected near-term rate cut might now be pushed back? The Fed (US Federal Reserve) made it clear at the last meeting that inflation is still a concern. Since then, one of the rate cuts that markets had priced in has effectively been pulled back. 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