The three pots
Most Indians arrive at retirement with money in three places they rarely think of together — the employer scheme, the voluntary long-term pots, and ordinary investments. Adding them up is the first useful thing you can do.
Chapter 2 · Beginner
Retirement money in India accumulates in three places with different rules, and most people have never seen them as one total.
No rates or limits here. Contribution ceilings, rates and tax treatment change with each year's rules — chapter 1 of the Tax subject's standing caution applies throughout, and the Income-tax Act itself was replaced on 1 April 2026.
Pot one: the employer scheme
For salaried employees, money deducted from salary with an employer contribution alongside, accumulating through your career.
Three things to know about it.
It accumulates quietly and is easy to ignore. For many people it is the largest retirement asset they have and the one they have never looked at.
It follows you between jobs, but only if you move it. Balances left behind at former employers are extremely common, and they are yours.
It is usually conservative. That is appropriate for the role it plays and it means this pot alone is unlikely to reach chapter 1's number if the number is sized on your actual spending.
The action is simple and overdue for most people: find every balance from every employer, and consolidate.
Pot two: the voluntary long-term pots
The schemes you choose to put money into — the National Pension System, long-horizon government savings schemes, and products designed for retirement specifically.
Their shared feature is a lock-in, and that cuts both ways. Chapter 7 of the Tax subject: a lock-in is a real cost if the money is needed, and a genuine benefit when it stops you doing something chapter 9 of the Risk subject warns about. Deciding which it is for you, deliberately, is the point.
PFRDA confirms these stack rather than compete: NPS "can be voluntarily subscribed alongwith any other pension scheme(s)" — though "an individual cannot have multiple NPS accounts."
Chapter 3 is the NPS in detail, because it is the vehicle built specifically for this job and the one most misunderstood.
Pot three: ordinary investments
Mutual funds, shares, deposits, property, gold. Not labelled retirement, and for many people the pot that will actually have to do most of the work.
Two advantages over the first two.
No lock-in, so the money is available if circumstances change — which chapter 11 of the Risk subject says matters more than the allocation on paper.
Full control of the allocation. The employer scheme and the structured schemes have their own mandates; here you choose, which means chapters 5 to 8 of the Mutual funds subject apply directly.
The disadvantage is the same thing: no lock-in means nothing stops you spending it, and most retirement shortfalls are not investment failures but withdrawals made for something else.
Adding them up
The first genuinely useful exercise in this subject.
| Balance today | |
|---|---|
| Employer scheme — current job | |
| Employer scheme — previous jobs | |
| NPS, if any | |
| Long-term government schemes | |
| Mutual funds and shares earmarked for this | |
| Total |
Then compare with chapter 1's corpus estimate, and note two things.
Today's total is not what you will have. It has years left to compound, plus everything you will add.
The gap tells you the monthly contribution required. Which is the number that actually changes behaviour, and chapter 8 turns it into a plan.
What not to count
Your home, unless you genuinely intend to sell it and live somewhere cheaper. A house you live in produces no income, and "I can always sell the house" is a plan that requires a buyer, a move, and somewhere to go.
Your children. It may happen and it is not a plan, and the generation being relied on is making their own retirement arithmetic.
An inheritance you have not received. Timing unknown, amount unknown.
Your employer's shares, at face value. Chapter 7 of the Risk subject: your salary already depends on that company, and so does the value of those shares.
The point
Retirement money sits in the employer scheme, the voluntary locked-in pots, and ordinary investments — and the three have different lock-ins and different degrees of control. Consolidate balances left at former employers, add everything into one number, and compare it with the corpus estimate. Do not count the house you live in or an inheritance you have not received.
Check yourself
4 questions. Every answer is explained afterwards, including the ones you get right — guessing correctly is not the same as knowing. Score 70% or more and the chapter is marked done.
Question 1 of 4
0 of 4 answered. You can submit with questions unanswered — they simply score zero.
Now do it with your own numbers
Find the current balance of every retirement pot you have, including ones from previous employers. Add them. Compare the total with the corpus estimate from chapter 1.
Balances from old employers are the ones people forget. They do not disappear, and consolidating them is usually worth an afternoon.