NPS Vs Fractional Property: Where should you invest for retirement?


Despite not being counted among traditional retirement planning options, fractional ownership can provide a healthful social security cowl to guard you in antique age.
Despite some barriers, NPS is a popular tool regarded for its affordability and superior returns.

invest for retirement

Although lots of us ignore the need for retirement planning, it is tough to overstate its significance in allowing you to lead a existence of dignity in your sundown years. The doubtlessly catastrophic combination of no earnings, rising inflation, and mounting living charges (inclusive of medical prices) can be an excessive amount to bear even for people with a modest lifestyle. This explains the lifestyles of a couple of retirement schemes provided employing the Government of India in addition to the private area to help you secure your sundown years.

Basics of NPS

Arguably the most famous of those is the National Pension System (NPS), launched via the Government of India in 2004 for authorities personnel and opened to the public in 2009. As per the scheme, subscribers are expected to contribute regularly to a pension account throughout their running years. Once you reach the age of 60, you can withdraw a part of the amount (60%) whilst being required to invest the relaxation of the corpus in a PFRDA-authorised annuity plan.

Despite some limitations, NPS is a famous instrument recognized for its affordability and superior returns. But there are other funding alternatives inside the marketplace like fractional ownership that could offer higher returns with flexibility, which are similarly suitable for retirement planning.

Fractional Ownership of Commercial Properties

Fractional possession is a pretty new concept in India that permits you to invest in business homes like office and department stores. One of the lesser-acknowledged information about the country’s real estate marketplace is that the commercial section becomes present process a sustained increase for numerous years before the pandemic. Currently, it’s miles on a restoration route with a sturdy outlook powered by underlying strengths in India’s office area market and the economic system.

In previous years, the high fee of industrial belongings, regularly jogging into numerous hundred crores of rupees, prevented the middle-class buyers from reaping the advantages of high returns. But the fractional ownership model opens up this area by enabling them to invest in a part of the assets at a miles smaller price ticket size.

Head-to-Head Comparison

Although fractional ownership does not appear as a convenient option for retirement planning, it can be beneficial in supplying appropriate returns and versatility. A head-to-head evaluation between NPS and fractional ownership suggests why the latter option can be more prudent.


When it involves investments, liquidity is a crucial aspect. As NPS is a regular retirement tool, the funding is locked in until you reach 60. Those in need of finances for any reason earlier than maturity can withdraw a maximum of 25% in their corpus. Fractional possession is extra flexible in this regard without a lock-in period and withdrawal restriction.


The fractional possession model gives more balance whilst compared to NPS. Investments in Grade A commercial properties, marked with the aid of exceptional tenants, lengthy lease periods (normally seven years), and airtight contracts tend to provide strong returns over prolonged horizons. By assessment, a certain percent of an NPS funding depends on the performance of the equity marketplace.

Returns and Capital Appreciation

NPS has a tune report of turning inappropriate returns within the nine-12% variety. In assessment, the common apartment yield for business assets is 9%. What’s extra, business homes undergo capital appreciation within the variety of seven-sixteen% annually, depending on elements like location. This twin gain of condo earnings and consistent capital appreciation outweighs the returns on NPS.


NPS offers full-size tax advantages in terms of investment, earnings, and maturity, though the earnings from annuity plans are taxed. Although the earnings from fractional ownership no longer experience tax blessings of any sort, they still compare favorably to NPS. The combination of condo profits and capital appreciation tends to outweigh the tax blessings on NPS, making fractional ownership a better preference.

Choosing the Best Option

Despite now not being counted amongst conventional retirement planning options, fractional ownership can offer a healthy social safety cover to shield you in antique age. The recent records of business belongings funding in India show that it brings tremendously excessive and solid returns. It may be a wise decision to consist of it for your retirement portfolio on the side of different gadgets.