Capitalmind Podcast Make your own pension
Jun 30, 2025
Retirement planning in India is evolving. With the rise of nuclear families, individuals now have to be proactive about their future. Discussions include the choice between pension schemes like NPS and UPS, and the importance of personal investment strategies. Behavioral insights reveal how forced savings can aid long-term wealth. The concept of a 'Mera account' is introduced to boost private sector retirement savings. Practical tips on managing volatility and optimizing tax efficiency round out the conversation, making retirement planning both accessible and actionable.
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Why Pensions Are Emotionally Appealing
- Pensions are attractive because they provide a guaranteed, inflation-linked monthly income and a sense of pride and security for government employees.
- Behavioral factors like trust in the government and avoiding family borrowing impact pension preference.
Pension Planning for Private Employees
- Private sector employees can replicate government pension benefits by saving about 12% of their post-tax income.
- Investing primarily in equities early and shifting gradually to debt as retirement nears is recommended.
Behavioral Benefits of Forced Savings
- Forced savings work well to accumulate retirement wealth by removing the choice to spend instead of save.
- Keeping retirement funds inaccessible prevents borrowing by relatives and supports long-term discipline.