Finsafe Director on Balancing NPS, Mutual Funds & Equity

Planning for retirement can often feel complex, given the wide range of investment options available to individuals. From government-backed schemes such as the Employees’ Provident Fund Organisation (EPFO) and the National Pension System (NPS) to mutual funds dedicated to retirement goals, each avenue carries its own level of risk, reward, and flexibility.

To help investors make sense of these options, CNBC-TV18 spoke with Mrin Agarwal, Financial Educator and Director at Finsafe India, who shared practical insights on how to create a balanced and sustainable retirement plan.

Why Equities Matter in a Retirement Portfolio?

According to Mrin Agarwal, achieving a sufficient retirement corpus requires more than relying solely on traditional, low-risk instruments like EPFO. She emphasized that the growing need for larger retirement savings is primarily driven by rising lifestyle expectations and expenses.

“The retirement corpus is only getting bigger, and that’s really driven by the lifestyle choices that we have,” Agarwal noted.

She illustrated this with a clear example:
For a 30-year-old individual whose monthly expenses amount to ₹1 lakh and who plans to retire at 50, the required retirement corpus would be ₹11.5 crore.

If this person were to rely only on NPS contributions, they would need to invest around ₹2 lakh per month to achieve that goal.

However, by including equities in the portfolio, the required monthly investment almost halves to approximately ₹1.15 lakh, highlighting how equity exposure can significantly enhance long-term wealth creation.

“If the person decides to add equities, then the amount to be invested almost halves,” Agarwal explained.

Also Read: Trump’s $300 Million White House Ballroom Backed by Corporate Titans

Balancing NPS and Mutual Funds

When asked about choosing between the National Pension System (NPS) and mutual funds, Agarwal said the decision largely depends on an investor’s involvement and discipline.

“Do you want somebody to just do it for you and you get that pension? Or would you like to plan it yourself and remain disciplined?” she said.

The NPS, being a structured and regulated scheme, suits investors who prefer an automatic, guided approach toward building their retirement corpus. It offers tax benefits and a steady income stream post-retirement, though with limited flexibility in withdrawals.

On the other hand, mutual funds, particularly equity-oriented ones, offer greater flexibility, liquidity, and potential for higher returns but require active management and consistent discipline from investors.

Agarwal emphasized that neither option is superior on its own; instead, an ideal retirement plan combines both—using the stability of NPS and growth potential of mutual funds and equities.

The Right Mix for a Stronger Retirement Corpus

Agarwal’s approach underscores the importance of diversification across instruments. She advised that a balanced portfolio combining fixed-income tools like EPF/NPS with growth-oriented assets like equities or mutual funds can help investors achieve financial independence while managing risk.

By blending these investment types, individuals can reduce monthly contribution requirements and still build a sizable retirement corpus capable of sustaining their post-retirement lifestyle.

She also noted that as lifestyle costs continue to rise, individuals must start retirement planning early and review their portfolio periodically to stay on track.

Conclusion

Finsafe India’s Director, Mrin Agarwal, highlights a clear message for all investors — relying solely on fixed-return instruments like NPS or EPF may not be enough to meet long-term financial goals. Including equities and mutual funds in a disciplined manner can provide the necessary growth and flexibility to secure a comfortable retirement.

By understanding one’s financial needs and risk appetite, investors can craft a personalized retirement plan that balances stability, growth, and tax efficiency—ensuring peace of mind in their golden years.

Click here to explore:
FII DII Data
IPO
BSE Sensex