Four glide paths, one saver

Most articles about asset allocation by age start from a heuristic and work outwards. It is more useful to start from the fact that India already has several official, age-linked or horizon-linked glide paths written into regulation, and that they do not agree with each other.

The spread at a single age is the point. A 35-year-old is simultaneously told, by different arms of the same state, to hold three-quarters of their money in equity and to hold barely a tenth of it there. Both instructions are live at once, and for most salaried people both apply, to different pots.

None of these came from Indian return data

It is tempting to read a regulator's glide path as an empirical finding — as though somebody ran the numbers on Indian equity and concluded that 50% at 35 was optimal. That is not what these are. Each reflects what its scheme was built to do.

1. EPFO is a guarantee, not a growth vehicle. It declares an interest rate its members receive regardless of markets, which forces the portfolio toward instruments whose returns are predictable. The pattern permits 45–65% in government securities and 20–45% in debt, leaving 5–15% for equity via index funds. A body that must announce a rate cannot hold a volatile book.
2. NPS Auto Choice is a menu built for people who will not choose. Its three options exist to span a range of risk appetites with a sane default, which is why LC50 sits in the middle. It is designed for the person who ticks nothing.
3. SEBI's life cycle bands are keyed to a date, not to you. They descend against years remaining to the fund's target year, so two people of very different ages in the same fund get an identical allocation. The mechanism and its consequences are worked through in life cycle funds in India, including where published explanations get the bands wrong.
4. “100 minus age” is a mnemonic from another market. No Indian regulator uses it. It survives because it is easy to remember, which is not the same as being right.

Your real allocation is none of these

Here is the part that matters more than any glide path, because it applies whatever you believe your target should be. A salaried Indian saver holds money in several of these systems at once, and the blended result is not what any one of them prescribes.

Take someone aged 35 with three pots. Assume an EPF balance of ₹15,00,000, an NPS balance of ₹8,00,000 sitting in the LC50 default, and ₹12,00,000 in equity mutual funds. Assume, generously, that the EPF corpus holds equity at the very top of the permitted band, 15%. Total holdings are ₹35,00,000.

This person's true equity allocation is 52.1%. Not the 75% of the aggressive lifecycle option, not the 65% of the folk rule, not the 65–95% a target-date fund of the same horizon would hold. Just above the LC50 default, and that only by coincidence.

Now consider what the same person would conclude if they did what most people do, and checked their allocation by looking at the accounts they think of as investments — the mutual funds and the NPS — while treating the provident fund as a separate thing that simply accumulates. On that basis equity is ₹16,00,000 out of ₹20,00,000.

The direction of the error is worth dwelling on. Someone who thinks they are aggressively positioned, and who therefore feels no need to add equity, is in fact holding a balanced portfolio. The correction is not necessarily to buy more equity — it may well be that 52% is right for them — but they cannot make that judgement while working from a number that is 28 points wrong.

What the heuristic was actually trying to capture

“100 minus age” encodes one true idea: the longer your money has to recover, the more volatility it can absorb. Sequence matters, and a fall early in a drawdown does more damage than the same fall later.

What it gets wrong is treating age as a proxy for horizon. They are not the same, and in India they come apart in ways that matter. A 55-year-old with a government pension indexed to dearness relief faces a very different problem from a 55-year-old whose entire retirement income must come from a corpus — the pension holder can carry more equity, not less, because their essential spending is already covered. Someone planning to stop work at 45 has a fifty-year horizon at an age the heuristic treats as late-middle. And a large EPF balance already supplies the ballast the rule assumes you need to add.

The more defensible way to set the number is to work from what the money has to do: how many years until you draw on it, what other income exists at that point, and how much of your spending is genuinely non-negotiable. Those are the inputs the retirement planner works from, and they produce a different answer for two people of the same age far more often than a glide path does.

How to find your own number

1. List every pot, including the ones you do not think of as investments. EPF, PPF, NPS, mutual funds, direct equity, fixed deposits, gold, and any employer superannuation. The pots people omit are almost always the debt-heavy ones, which is why omission biases the answer upward. For the securities half of that list, a consolidated account statement is the fastest way to find folios you have forgotten, provided you know which of the two documents by that name you are entitled to.
2. Assign each pot its actual equity share, not its label. An NPS balance is not equity; under the LC50 default it is half equity. A hybrid fund is not equity. Only the underlying holdings count.
3. Weight by value and add up. The blended percentage is the only number that describes your risk. Any per-account view is a fragment.
4. Compare it against your horizon, not your age — the years until you draw on the money, and what else will be paying your bills by then.
5. Re-check after any large flow. A year of EPF contributions, a bonus into a deposit or a property purchase can move the blend by several points without you making a single investment decision.

Step one is where most of this falls down in practice, because the pots live in different places and are valued on different days. Pulling them into one figure is the whole job of net worth tracking, and the net worth calculator will do the addition if you have the balances to hand.

Questions worth asking

What equity allocation does the government actually recommend at 35?

There is no single answer, because four official frameworks give four different ones. NPS Auto Choice offers 75, 50 or 25 per cent depending on which lifecycle fund you pick, with 50 per cent as the default. A SEBI life cycle fund fifteen or more years from its target may hold 65 to 95 per cent. EPFO invests only 5 to 15 per cent of fresh contributions in equity. None is derived from Indian return data; each reflects what that scheme was designed to do.

Is 100 minus age a good rule for asset allocation in India?

It is a mnemonic, not a finding, and no Indian regulator uses it. At 35 it prescribes 65 per cent equity, which sits between NPS Auto Choice’s aggressive and moderate options and well above what EPFO does with your provident fund. Its deeper problem is that it keys allocation to age alone, ignoring how long the money must last, what else you hold, and whether you have any other income in retirement.

Why does EPFO hold so little equity?

Because the pattern of investment notified by the Ministry of Labour and Employment permits only 5 to 15 per cent of incremental accretions to go into equity, with 45 to 65 per cent in government securities and 20 to 45 per cent in debt. It is also worth noting that the equity limit applies to fresh contributions rather than the accumulated corpus, and EPFO only began investing in equity in 2015, so the equity share of the total corpus is lower than the headline band suggests.

Does my EPF balance count as debt in my asset allocation?

Overwhelmingly, yes, and leaving it out is the most common reason people misjudge their own allocation. EPFO’s investment pattern puts most of the money in government securities and debt, so a large EPF balance behaves like a large debt holding. Someone who checks only their mutual funds and NPS can believe they hold 80 per cent equity while their true share across everything is nearer half.

Which NPS Auto Choice lifecycle fund is the default?

LC50, the Moderate Life Cycle Fund, which starts at 50 per cent equity up to age 35 and tapers from age 36. If you never make an active choice, that is what you hold. PFRDA also introduced a Balanced Life Cycle Fund in October 2024, which holds up to 50 per cent equity but begins tapering at 45 rather than 35, extending the growth window by a decade.

Related

Sources

• Pension Fund Regulatory and Development Authority, National Pension System. The Auto Choice lifecycle options LC75, LC50 and LC25, their equity allocations up to age 35 and the floors they descend to, LC50 as the default, and the Balanced Life Cycle Fund introduced in October 2024 whose tapering begins at 45. Retrieved 28 August 2026.
• Securities and Exchange Board of India, Master Circular for Mutual Funds, Annexure 1B. The permitted equity, debt and commodity bands for life cycle funds by years remaining to the target date, including 65–95% equity at fifteen or more years out and 5–20% inside the final year.
• Employees’ Provident Fund Organisation and the Ministry of Labour and Employment, pattern of investment. Fresh accretions allocated 45–65% to government securities, 20–45% to debt, 5–15% to equity through index funds and exchange traded funds, and 0–5% to short-term debt. Equity investment was first permitted by the pattern notified in April 2015.

This is an explanation, not advice about your money. TLDR Money is not a registered investment adviser and earns no commission on any product mentioned. Figures are illustrative; your own numbers, taxes and circumstances will differ.