NPS vs PPF vs SIP for early retirement
A 35-year-old already invests ₹80,000 a month and has ₹1.5 lakh a year more to put away. They hope to retire at 50. The question is where that money helps most. NPS is locked until 60 and 40% of it must buy an annuity; PPF earns a fixed rate tax-free; a SIP can be sold any time but gains are taxed.
Chance the money lasts to 90 if they retire at 50, by where the ₹1.5 lakh goes
| Not invested | 45% |
| Equity SIP (₹12,500 a month) | 52% |
| PPF (₹1.5 lakh a year) | 50% |
| NPS (₹12,500 a month) | 53% |
Tax deductions can tip the balance: under the Old Regime, NPS and PPF cut your tax today, which this comparison leaves out. For early retirement, the more important question is whether you can reach the money in the years between leaving work and 60.
The assumptions
- Age 35, money has to last until 90.
- Take-home pay ₹3.00 L a month, rising 2% a year above inflation until retirement.
- Household spending ₹1.20 L a month in today's money, 90% of it after retiring.
- SIP ₹80k a month, raised 5% a year.
- Health insurance ₹50k a year, out-of-pocket medical costs from 70, and a 3% yearly chance of a ₹10.0 L bill insurance won't cover.
- Equity returns 11% a year on median with 22% volatility, inflation 6%, 90% confidence, New Regime tax.
All numbers come from the same engine as the calculator, run over 1,000 market histories. See how it works for the defaults and their sources.
This is an illustration, not advice. Your own numbers will give a different answer.