Things That Make NPS An Effective Retirement Tool

India is currently the fastest growing large economy in the world.

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At the same time, it also is projected to age rapidly. Longevity of present and future generations of Indian would be much higher. This aging is likely to accentuate as every fifth Indian is expected to be over 60 years of age by the middle of this century, exerting pressure not only on our younger generation, but also on our overall financial resources. Living longer implies that one needs money for a longer period to take care of oneself which becomes challenging because of the increase in medical expenses, increasing nuclear family structure, and limited access to formal credit facilities.

What Is NPS?

In the past, pension was perceived to be the privilege of government employment. It is no longer so with the introduction of the National Pension System (NPS) in 2004, first for the government employees, and then when it was extended to private corporates including the common person, and now to children with the scheme of NPS Vatsalya, which was recently launched by the government.

NPS Vatsalya can be seamlessly ported to workplace pension on the child coming of age and joining the workforce, thereby providing continuity to one's retirement savings account. Thus, now any member of the family from infancy to the age of 70 years can join NPS.