I am 37 yeaes old government employer. I am investing 50% of my income in mutual funds from last 8-9yrs and 10% in pf. Should i invest 5% of income in nps for income security after retirement as the amount in nps is locked.my mutual fund investment are doing ok. Should i opt for nps?please guide me.
NPS is not fixed income products where you can guaranteed pension. It is market linked product and underlying is Equity, Govt bonds and Corporate Bonds. You can assume Govt bonds as fixed income but rest two are purely marked linked. Over a long run say 20 years you can rely that Equity market may give better return but Corporate bonds are worst performer which brings down your overall return. Past 3 years I have seen phases where equity components does better where as in some phases Govt bonds, but never seen corp bonds performing. But when you go any permutations combination of NPS subscription options, you are bound to have corporate bonds units. Along with this annual fee charges.
My opinion is you are doing good with mutual funds. If you want a fixed component then go for PPF along with mutual funds.
Even Govt Bonds are also not completely RISK-FREE. Except for default risk, such bonds are vulnerable of interest rate risk.
Completely agree, even default risk e.g. US treasury bonds went default (rare chances).