1 week ago

How Gig Workers Can Use NPS to Build Retirement Savings

No predictable monthly income? How gig workers can use NPS to save for retirement and build a long-term corpus · livemint.com

Gig workers may earn different amounts each month, but they can still save for retirement.

The National Pension System, or NPS, allows people to contribute different amounts at different times.

One way to start is to save 5-10% whenever money is received.

People who earn more in a good month can make a larger contribution.

Starting young gives the money more time to grow.

An example using an assumed 8% yearly return shows that saving ₹1,000 monthly from age 25 could produce more than starting at age 35.

Younger savers may put more money in equity, but they must consider how much risk they can handle.

The most important lesson is to keep saving regularly instead of stopping whenever income or markets change.

Key facts

Suggested starting contribution: Earmark 5-10% of every payment received, according to Sumit Shukla.
Broader savings guideline: Pranay Ranjan Dwivedi said some people may gradually aim for 15-20% of income; this is not an NPS requirement.
Illustrative return: An example assumes an annual return of 8%; actual returns are not guaranteed.
Illustrative corpus: Investing ₹1,000 monthly from age 25 to 60 could produce about ₹23 lakh, versus roughly ₹9.6 lakh when starting at age 35.
Maximum equity allocation: Active Choice allows equity exposure of up to 75% under common NPS schemes.
NPS e-Shramik contributions: For eligible platform workers, the article says PFRDA does not prescribe a regulatory minimum or maximum contribution threshold.
Alternative allocation method: Age-based Auto Choice gradually reduces equity exposure as retirement approaches.

livemint.com · 1 week ago