Starting at 25, 35 or 45: what waiting really costs your retirement

Take three friends who each put ₹10,000 a month towards retirement until they turn 60. The only difference is when they start. The results are startling.

The friend who starts at 25 puts in only ₹12 lakh more than the one who starts at 35, but ends up with more than two and a half times the pot.

Why the early years matter so much

Your money earns returns, and then those returns earn returns of their own. This snowball, called compounding, grows fastest at the end. The money you invest in your 20s has three decades to snowball; money invested at 55 has only five years.

How much it takes to catch up

To end up with the same ₹2.82 crore as the friend who started at 25:

Waiting ten years makes the monthly amount you need about 2.5 times bigger. Waiting twenty years makes it more than seven times bigger.

Raising your investment each year helps even more

Few people invest the same amount for 30 years: salaries rise, and so can your savings. If each friend raises their monthly amount by 5% every year, their pots at 60 grow to about ₹4.87 crore (starting at 25), ₹1.71 crore (at 35) and ₹51 lakh (at 45).

Five practical tips

• Start with whatever you can, even ₹2,000 a month. You can raise it later.
• Raise it with every salary hike, before you get used to spending the extra.
• Use employer contributions if your company offers NPS through payroll.
• Don't stop when markets fall. You buy more units cheaply when prices are low.
• Review once a year and update your plan as your income and goals change.

These examples assume a steady 9% yearly return and yearly investments made at the start of each year, purely to show the effect of time. Actual NPS returns depend on your asset mix and the markets, and past returns may not repeat.