Choosing between active or auto investment for National Pension System.
The National Pension System (NPS) is a government-sponsored pension scheme that provides financial security to individuals after retirement. Initially launched in 2004 for government employees, the scheme was later opened up to everyone in 2009. It is an effective means of creating a big corpus in the long term and arranging pensions after retirement, which is why investment in NPS has been steadily increasing.
If you are an Indian citizen between the ages of 18 to 70 years, you can invest in NPS. You can contribute regularly during your working years and at the age of 60, you can withdraw a portion of the accumulated money and receive regular pension income from the remaining amount. NPS offers two investment options, namely auto and active.
Auto choice is where subscribers give the fund manager the freedom to invest their money wherever they see fit, while active choice allows the subscriber to select their own asset blend. Subscribers can determine the ratio in which their money will be spread across different asset classes under the active choice option. However, there are restrictions, and a maximum of 75% can be allocated to stocks.
For those considering the active choice option, there are three factors to bear in mind. First, consider whether you are capable of valuing different asset classes and making the right capital allocation. Second, if you already have investments elsewhere, can you include NPS as part of your overall portfolio? Finally, be aware that changes to the NPS portfolio may be necessary in the future.
NPS offers three funds under the auto choice option, namely Default Moderate Life Cycle Fund, Conservative Life Cycle Fund, and Aggressive Life Cycle Fund. The maximum equity investment can be up to 50%, 25%, and 75% respectively.
Investing in NPS is an effective way to create a corpus for retirement and ensure financial stability in old age. By choosing the appropriate investment option, you can optimize your returns and enjoy a comfortable life after retirement.
Read more: SBI extends deadline for special FDs, know which banks beside SBI are providing such offers
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "National Pension System, Investment, additional specified investments, Active Or Auto, NPS investment choices")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}