NPS Returns Up — But Your ₹1Cr Corpus Won't Last?

NPS is delivering better returns lately, but most Indian savers are planning to retire with far less money than they actually need. Here's how big the gap really is — and what to do now.

Here's what happened: NPS equity fund returns have improved, with long-term CAGR of 10–12%, outperforming traditional retirement instruments like EPF and bank FDs.. A 2026 study by HDFC Pension found that most Indians significantly underestimate the retirement corpus they will actually need to sustain their lifestyle.. Rising life expectancy (now ~72 years nationally, higher in urban areas) and medical inflation mean retirement can last 25–30 years — far longer than older generations planned for..

What you should do: Calculate your actual retirement corpus using a reverse calculation: (monthly expenses today × 12 × 25 years) adjusted for 6% inflation — you'll likely land above ₹2 crore.. Increase your NPS Tier-I contribution to at least ₹50,000 per year to claim the full ₹50,000 additional tax deduction under Section 80CCD(1B), on top of your 80C limit.. Check your NPS asset allocation on the NSDL or KFin portal — if you're under 45, ensure you have maximum allowed equity exposure (75%) to let compounding do the heavy lifting..

Annuity rates on NPS payouts are often 4–5% — buy an annuity with inflation indexation even if it costs more upfront. Without it, your fixed pension loses half its real value in 12 years at 6% inflation.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.