NPS offers flexible retirement savings for gig workers

The National Pension System (NPS) allows gig workers, freelancers and self-employed individuals with irregular incomes to save for retirement without committing to fixed monthly contributions. Experts suggest earmarking 5-10% of each payment received, rather than setting a rigid monthly amount, and gradually aiming for 15-20% of income. For platform workers under the NPS e-Shramik model, the Pension Fund Regulatory and Development Authority (PFRDA) does not prescribe a minimum or maximum contribution threshold.

Starting early is crucial: investing Rs 1,000 monthly from age 25 at an assumed 8% annual return could build a corpus of about Rs 23 lakh by age 60, compared to roughly Rs 9.6 lakh if starting at 35. Young subscribers with 25-30 years until retirement may consider equity exposure of up to 75% under Active Choice, though risk capacity depends on income stability and financial obligations. The key is maintaining the savings habit even when income fluctuates.