Retirement planning is no longer optional, it’s essential. With life expectancy increasing and limited social security in India, having a personal retirement corpus is crucial. The most common retirement funds in India are National Pension System (NPS), Employees’ Provident Fund (EPF), and Public Provident Fund (PPF). Each of these has unique features, tax benefits, and withdrawal rules.
If you’re wondering how much you’ll need for retirement, check this detailed guide on 3 Tips to Calculate Your Retirement Corpus.
A voluntary, market-linked retirement scheme regulated by PFRDA.
Two account types:
A statutory, defined contribution retirement scheme for salaried employees in firms with 20+ employees.
Both employee and employer contribute 12% of basic salary; contributions grow with annual interest (currently 8.25%).
A government-backed, long-term, fixed-return savings scheme open to all (resident Indians and even minors via a guardian).
Minimum ₹500 deposit; maximum ₹1.5 lakh per financial year; interest compounded annually (currently ~7.1%).
For an interesting perspective, also explore 5 Lesser-Known Facts About Public Provident Fund.
| Scheme | Benefits | Drawbacks |
|---|---|---|
| NPS | Potentially higher returns via equity, flexibility in asset allocation (Active/Auto Choice), additional tax deduction ₹50,000 u/s 80CCD(1B) | Market-linked—returns volatile; typically, 60% of corpus withdrawn as lump sum (tax-free under old regime), 40% must purchase annuity (taxable income); if corpus ≤₹5 lakh, 100% withdrawable tax-free; no tax benefits in new regime. |
| EPF | Employer-matched savings, disciplined contributions, relatively stable interest, tax exemption on contributions & maturity after 5 years | Withdrawal restrictions (certain conditions/lock-in); limited liquidity while employed |
| PPF | Zero risk, tax-free returns and maturity (EEE), long-term compounding, open to all, extended blocks after 15 years | Long lock-in (15 years), limited contribution ceiling, relatively lower returns than market-linked options |
Note: Tax benefits are subject to amendments under the Income Tax Act, 1961; please consult a tax advisor.
Combining NPS, EPF, and PPF helps balance risk and returns while optimizing tax benefits:
This “3-pronged” approach allows flexibility, diversification, and a tax-efficient corpus. Avoid overstating returns; market-linked components remain volatile.
For a broader view on why retirement planning is vital at all ages, read Top 10 Reasons Why Retirement Planning is Essential for Your Future.
While focusing on NPS, EPF, and PPF, those planning further can consider PNB MetLife’s retirement and long-term savings solutions—aligning with IRDAI compliance and diversified needs:
These PNB MetLife offerings can be integrated with statutory retirement schemes for added retirement income planning, particularly when annuitizing part of the NPS corpus, needing structured payout, or exposure to market-linked savings with insurance cover.
In summary:
Building a secure retirement corpus in India doesn’t hinge on a single product—it’s about a diversified, tax-efficient, and personalized strategy. Whether you start with EPF, PPF, or NPS, or layer in PNB MetLife solutions, the key is consistent planning, regular reviews, and expert guidance.
Take control of your financial future today—your retirement self will thank you.
Yes. EPF is automatic if you're salaried; you can also open PPF and contribute to NPS as per your savings capacity. This allows you to diversify risk and maximize tax benefits.
Typically, NPS offers potentially higher returns (9–12% on average) but is subject to market volatility. EPF provides steady returns (~8–9%), and PPF offers safer fixed returns (~7%).
Up to 60% of the NPS corpus withdrawn at retirement is tax-free. The remaining 40% must be used to purchase an annuity, and annuity income is taxable as per your income slab.
Yes. From the 7th financial year, you can withdraw up to 50% of the balance at the end of the 4th year or the preceding year, whichever is lower.
By combining NPS, EPF, and PPF, you get diversification, tax efficiency, and a mix of safe and growth-oriented investments—helping you build a balanced retirement portfolio.
NPS is considered better for those with higher risk tolerance and longer investment horizons because of equity exposure and additional tax deduction under 80CCD(1B). PPF is better for conservative investors seeking guaranteed, tax-free returns.
Yes. Your EPF balance can be transferred to the new employer’s PF account using the UAN (Universal Account Number). It is advisable to transfer rather than withdraw early to preserve retirement savings.
If you do not withdraw at 15 years, the account is automatically extended in 5-year blocks. You can choose to continue with or without fresh contributions, and your balance will keep earning interest.
EPF withdrawals are tax-free if you have completed at least 5 years of continuous service. If withdrawn earlier, the contribution and interest may be taxable, and TDS can be deducted.
Financial experts recommend saving at least 15–20% of your monthly income for retirement. The actual amount depends on your age, lifestyle goals, expected retirement age, and inflation.
Piyush Kataria, SEO Manager at PNB MetLife, is a seasoned digital marketing strategist with over a decade of experience in optimizing websites for search engines. His expertise extends to keyword research, content strategy, technical SEO, and link building, all of which have been instrumental in driving organic traffic growth at PNB MetLife. With a strong foundation in life insurance, Piyush leverages his industry knowledge to create targeted and effective SEO campaigns.
Sakshi Malhotra is a seasoned marketing professional associated with the Life Insurance industry since 2007. At PNB MetLife, she heads Digital Marketing and Direct to Customer line of business. She is responsible for driving effective customer engagement through the company’s website and social media channels. In addition, she drives customer online buying journeys to help them buy the right product.
Disclaimer:
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
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