Retirement investing in 2025: Key returns, hard lessons & the 2026 outlook

Retirement Planning: Returns, risks, scams, and key portfolio shifts shaping retiree planning for the year ahead

Retirement investing delivered a mixed but broadly stable returns for India’s elderly this year. Returns held steady in most fixed-income products, while equity performance varied sharply depending on allocation and timing.

 

Across the most widely used instruments, returns were steady to moderately strong.

 

“EPF paid 8.25 per cent for 2024-25, while top government small-savings schemes such as the Senior Citizen Savings Scheme (SCSS) and Sukanya Samriddhi Yojana gave 8.2 per cent,” said Vishwajeet Goel, head of Pensionbazaar.

 

He added that post office deposits delivered 6.9-7.5 per cent and bank fixed deposits for senior citizens remained in the 7-7.5 per cent range.

Market-linked returns were more uneven.

According to Goel, National Pension System equity schemes delivered mid-20s to low-30s per cent on a one-year basis, while corporate bond schemes earned around 9 per cent and government bond schemes 4-6 per cent.

 

A typical near-retiree with a balanced NPS allocation would have seen 8-12 per cent overall.

 

Equity indices, however, returned far less.

 

“Nifty and Sensex TRI produced roughly 6 per cent in FY25,” said Amar Ranu, head of investment products and insights at Anand Rathi Shares and Stock Brokers. 

 

The mistakes that cost investors

Experts highlighted a cluster of errors. Goel said many retirees stayed overexposed to bank deposits, ignored tax-efficient deductions, or chose unsuitable annuity options that reduced payouts or left spouses exposed. He added that “medical inflation at 12-15 per cent far outpaced the 7-8 per cent returns many retirees earned”.

 

Ranu pointed to the rising threat of scams. He cited the case of a retired Pune bank manager who “lost Rs 2.2 crore after being lured into an online investment scam promising guaranteed returns”.

 

How to prepare retirement planning for 2026

Both experts recommended a gradual shift to an income-secure but growth-conscious portfolio.

 

Goel suggested reducing mid- and small-cap exposure, strengthening debt allocation, and building a 3-5 year liquidity bucket. Ranu advised combining SCSS, EPF, short- to medium-term debt funds, REIT/InvITs, laddered FDs, and a modest equity sleeve, supported by a 6–12-month emergency buffer.

 

The 2026 outlook and key regulatory changes

Goel expects long-term rates to trend lower and urged retirees to “lock stable yields now”.

 

Ranu forecasts 5.5-7.5 per cent on bank FDs and 6-6.5 per cent on G-secs in 2026, with annuity payouts likely to compress if yields fall.

 

Regulatory changes in 2024-25 included the introduction of the Unified Pension Scheme, the launch of NPS Vatsalya, revised NPS/UPS/APY charges, and updates to insurance taxes and GST, developments both experts said retirees must track closely when planning for 2026.