When to Start Retirement Planning in India

Short answer: Start the day you earn your first salary — the earlier you begin, the more compounding does the heavy lifting and the less you have to save each month.

Why Early Beats Late

The power of compounding rewards time more than amount. Someone who invests modestly from their twenties can end up with a larger corpus than someone who invests much more but starts in their forties, simply because the early money compounds for longer. Lost years are almost impossible to make up.

Estimate Your Target

Think about the annual expense you will want in retirement, remember that inflation will make that number much bigger by the time you retire, and that you may live for decades after stopping work. A rough goal is a corpus large enough that a safe withdrawal each year covers your inflated expenses.

Use the Right Vehicles

EPF and PPF form the stable base. Equity mutual funds via SIPs provide long-term growth that beats inflation. NPS adds an extra tax deduction and disciplined locking until old age. Blend growth assets while young, shifting gradually towards safety as retirement nears.

Account for Inflation and Healthcare

Medical costs rise faster than general prices and become a major retirement expense. Build a separate health-insurance plan that continues into old age, and assume your cost of living will keep climbing through retirement, not freeze on the day you stop working.

Revisit Regularly

Life changes — income, family, goals and markets all shift. Review your retirement plan every year or two, step up your contributions as your income grows, and resist dipping into retirement savings for non-emergencies.

Sources: PFRDA on NPS

This explainer was written by The Dispatch desk to answer a question readers commonly ask. It is general information, not personalised financial advice.