At 40, should I invest in NPS for my own pension or in NPS Vatsalya for my 7-year-old son?

As you are already 40 and without any investment in any pension scheme, it may be better to start with your own NPS account. However, you should first try to get a complete understanding of NPS and invest only if you are convinced that the scheme can help meet your post-retirement financial goals.

Although NPS has a lot of good features, including tax benefits, you should not start investing in it or any other financial product if you don't need it in your portfolio or if you don't understand it properly. This will be possible only if you try to read about the scheme from authentic, and preferably official, sources. In case you can't, you can take the help of a trusted financial advisor.

Some FAQs

If you have already opened your son's NPS Vatsalya account, you may contribute some amount every year to keep it alive and hand it over to your son when he starts working and earning on his own. Over the long term, it will give a great start to your child when he starts saving for his own retirement.

Parents can open the NPS Vatsalya account in the name of their children aged below 18 years. Once the child attains the age of 18 years, the Vatsalya account will transition into the NPS Tier-1 Account. And all the features, including benefits and exit norms of the NPS Tier I for All citizen Model will apply. However, a fresh KYC will need to be done within three months of the child reaching 18 years of age for further contributions.