Archive · 30 Jul 2026
NPS Retirement Planning: When to Reduce Equity Exposure
The National Pension System (NPS) is a government‑backed retirement plan in India.
Experts say you should start cutting back on stocks about 10 to 15 years before you retire, usually when you’re 45 to 50 years old.
This means slowly moving money from stocks to safer things like bonds.
Doing it gradually helps keep your savings safe if the market drops, but still lets you grow your money over time.
It’s important to check your plan every year and adjust if your life or money situation changes.
NPS allows investors to choose between Active and Auto Choice asset allocation.
Experts recommend starting to reduce equity exposure 10–15 years before retirement, around age 45–50 for a 60‑year retirement.
Active Choice lets investors set a fixed equity cap (up to 75%) and actively rebalance, while Auto Choice automatically adjusts allocations with age.
Gradual de‑risking (shifting 2–5% per year from equity to debt) protects against market volatility and sequence‑of‑returns risk.
Maintaining some equity exposure is advised to beat inflation and preserve purchasing power during retirement.
- Who
- Investors in the National Pension System and experts Vishwajeet Goel and Gibin John
- What
- Advice on when and how to reduce equity exposure in NPS portfolios
- When
- 10–15 years before retirement, typically age 45–50 for those retiring at 60
- Where
- India, under the National Pension System scheme
- Why
- To protect accumulated wealth from market volatility while preserving long‑term growth potential
- Scheme
- National Pension System
- Recommended De-risking Start
- 10–15 years before retirement
- Typical Age for De-risking
- 45–50 for a 60-year retirement
- Active Choice Equity Cap
- 75%
- Auto Choice Life Cycle Funds
- LC25, LC50, LC75, LCA