Compounding Time Is Your Only Irreplaceable Asset
Retirement planning is math, not hope - you need a specific corpus to generate inflation-adjusted income for 25-30 years post-retirement. Starting at 25 versus 35 means you need to save half as much monthly to reach the same goal, thanks to compounding. A ₹3 crore retirement corpus needs ₹15k monthly SIP started at 25 with 12% returns, but ₹35k monthly started at 35 for the same outcome.
Every year delayed costs you exponentially more. Most people drastically underestimate how much they need - ₹50k monthly expenses today becomes ₹2.5 lakhs in 25 years at 6% inflation.
EPF and NPS Alone Won't Get You There
Employee Provident Fund and National Pension Scheme are foundation blocks, not complete solutions. EPF gives you forced savings and employer matching but caps at ₹1.8 lakhs annual contribution (12% of ₹15 lakhs basic). NPS offers tax benefits and equity exposure but locks capital until 60 with mandatory annuity purchase at retirement.
Both together might give you 30-40% of retirement needs if you're diligent - the remaining 60-70% comes from personal equity investments, real estate, or business assets. Relying purely on EPF means a massive lifestyle downgrade post-retirement.
Asset Allocation Shifts From Growth to Preservation
Retirement planning evolves across decades - aggressive equity exposure in your 20s-30s, gradual shift to balanced portfolios in 40s, and capital preservation focus in 50s. You can recover from market crashes at 30; you cannot at 58 when retirement is 2 years away. Post-retirement, you need a mix of debt for stability and equity for inflation protection - going 100% debt means your corpus loses purchasing power, going 100% equity risks sequence-of-returns disaster if markets crash early in retirement.
Systematic withdrawal plans from balanced portfolios work better than annuities for most retirees, but require discipline and ongoing management.
