Money Money Money: Experts discuss investing in NPS
In this episode of ‘Money Money Money’, Preeti Khurana, Chief Editor, Clear and Kalpesh Ashar of Full Circle Financial Planners discuss retirement planning as to choose the national pension scheme (NPS) or Mutual Funds.
October 1 is the International Day for Older Persons and this year, the Pension Fund Regulatory and Development Authority (PFRDA) has marked this day as 'NPS Diwas'.
In this episode of ‘Money Money Money,’ the focus is on a complete ‘SWOT’ analysis of the national pension scheme and find out how it scores versus mutual funds when it comes to building your retirement plan.
Preeti Khurana, chief editor at Clear said, "Whenever you are planning your portfolio, I think NPS holds a great place in that portfolio. Depending on what your risk appetite is, you can choose a mechanism that works for you. Focusing on various advantages of NPS, I feel that if you want to get into a product, which is equity-backed, which helps you build a purpose for your retirement, if you don't have a pension, then NPS is what you should be looking at. Especially the younger generation, those who are in their 20s and 30s, you have just started working, when they reach the 50-year milestone, the 60 years of their life is when you know these things will come to their advantage."
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She added, "There hasn't been a single budget, where we don't see a reform related to NPS. So this is a product that the government is popularising. The government wants people to invest in this product. We have also seen that this has been quite well managed. So amongst all the other options that are present in the market, when you are planning your retirement, I think NPS is something that one should consider."
Kalpesh Ashar of Full Circle Financial Planners said, "My personal view is that it is still not evolving as quickly as it should be and probably that is the reason why it has not taken off or it is not as popular in the investor mindset or the investor talk or the investor portfolio per se. The main reason is that people have found mutual funds to be a very easily accessible way of planning for their investments be it the short-term or the long-term. Another setback is that PF is always an instrument, which is seen as more of a government instrument and not as a very universal type of thing that needs to be changed."
"Also, the wide choice, which mutual fund today offers is just expanded phenomenally. In the pension fund domain, I would say, you are still having more of a large-cap equity composure of the investments, whereas mutual funds offer a wide array of choices in the equity space."
For the full interview, watch the accompanying video
(Edited by : Jomy Jos Pullokaran)
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