The second edition of IRIS shows that 59 per cent of urban Indians believe that their savings will not last even 10 years into retirement. The survey had 3,220 respondents in 28 cities, including six metros.
Study highlights serious price-action gaps retirement planning, Urban Indians have a very rosy outlook on retirement, tinted with more time for family, travel and less stress, but very few have made the move towards that goal. “Our study indicates that a vast majority dream of retiring comfortably, and yet 37% have not even started planning for retirement,” explains Prashant Tripathi, Managing Director and CEO, Max Life Insurance.
What is stopping Indians from planning for retirement? About 68% say they have enough money or that their children will take care of them, 29% do not have enough surplus, while the remaining 23% do not know how and where to start.
Interestingly, runaway inflation has prompted many to plan for retirement, with 29% of respondents listing it as a major trigger. In 2021, inflation was on the mind of just 18%. Other key factors for retirement planning were the recommendation of a spouse (50%), the receipt of health issues (47%) and the recommendation of a financial advisor (43%). These numbers will not add up to 100% due to multiple options.
On a positive note, however, there is a growing awareness of the need to start early. 86% of respondents wished they had started saving for retirement early. Most of them (about 44%) see retirement planning as one of the first things to do when starting out.
Statistics show that the elderly population in India is expected to increase by 41 per cent to 194 million by 2031. And which is a sign of increased emotional and family dependence, one in every two Indians is certain that they want to be with their children after retirement. Naturally, a significant portion, about 39%, depend on their children to take care of them in their later years.
However, as Tripathi says, “the expectations of emotional support from children are misplaced, especially when the nuclear family structure, where children live separately from the parents, dominates the urban culture”.
The study also highlighted the dichotomy between what Indians want and the actions they take towards those goals. While 79 per cent of Indians believe they will be healthy at the time of retirement, only 40 per cent do regular physical activities to stay fit. In fact, 45 per cent of those surveyed had not undergone a medical examination in the last three years.