How much should you invest in NPS? | Mint

For many first investors, the question is not whether they should invest-it is how much. In Aitver 5 of “NPS Made Simple”, Subhazis Ghosh, CEO of Kotak Mahindra Pension Fund, sits at Munt to break down the NPS contribution strategy: from the minimum needed to the ideal asset allocation based on your risk assessment and life phase. With the help of the scenario of 30-year-old Mena, who wants to start saving for retirement, but does not know how much to contribute or what returns to expect, the episode demystifies some of the most yours inferred questions about NPS investment. Q: What is the minimum and maximum that one can contribute to NPs? The minimum annual contribution is only £ 1,000. That’s it. There is no upper limit – you can invest as much as you want. Of course, tax benefits are limited, but you can continue to contribute further if these limits want to grow as UU retirement corpus. Q: What are the asset classes under NPS, and where does the money go? NPS invests in four asset classes – equity (s), corporate bonds (C), government security (G) and alternative assets (A). E: Equity-Top 200 listed companies C: Corporate bond-high-security debt instruments G: State Securities A: Alternative Assets Rreits, Invitations, etc. Each subscriber can adjust the award on these classes, depending on their risk profile. Q: Can one choose different fund managers for different asset classes? Yes, and this is one of the biggest benefits of NPs. You can select separate fund managers for each asset class under both Tier 1 (Retirement Focus) and Tier 2 (Flexible, Liquid) accounts. In fact, you can potentially work with up to six different fund managers at the same time. Q: Can I change my fund manager or assignment? Absolutely. You can switch your fund manager once a year and change your asset allocation four times a year, free. These changes are not taxable – a great advantage compared to other financial instruments. Q: How do NPS fund managers perform in the long run? Ghosh points out that the difference in returns between the upper and lower executive NPS fund managers over a 7-10 -year -old horizon is often only 1%. ‘If the lowest is 9.7%, the highest can be 10.7%. Wherever you have invested, if it is within NPS, you have already made a smart choice. “Q: What is the difference between active and auto -choice? With Active Choice can choose your asset mixture (up to 75% in equity). Auto Choice uses in advance defined life cycle -based models: LC75: High exposure to equity at a young age, gradually decreasing. 50% exposure to shares up to 45 -year -olds, which is gently decreasing. Salary cycles. Its logic? Pick up: Whether you want full control or a simplicity, it wants a structure that fits. With the lowest fund management costs and flexibility, NPS is built to support you over decades. “Look at episode 5 to learn how to align your contribution strategy with your life goals – and to build pension wealth with confidence. The content does not, including the accuracy, completeness or any errors or omissions.