So, how financially prepared are Indians to retire?
According to a recent survey conducted by Max Life Insurance in partnership with Karvy Insights, “Retirement evokes positive sentiments, yet 1 in 3 Indians do not want to retire. While health and financial preparedness for retirement is low, The IRIS shows that urban Indians have an overall positive outlook on retirement. 68% associate it with positive views such as more time to care for a family, hassle-free living and more independence. Despite this, 33%, or about 3 in 1 in 1 respondents do not want to retire. 19% said that they prefer to retire between the age of 56 to 60. In comparison, 12% preferred to retire later even between the age of 61 – 65 years.
The survey was conducted to ascertain the readiness of urban India to lead a healthy, secure and financially independent retirement life. For this, in a self-administered digital study, 1800+ respondents were questioned across 28 cities including 6 metros, 12 tier I cities and 10 tier II cities.
Here are some of the other key findings of the survey:
Retirement preparation is highest in West Zone and least prepared in Metro, North and South Zone
With a retirement index of 49, West Zone outperformed other regions in terms of overall preparedness
towards retirement. The former came second with a retirement index of 45, with both North and South standing at 42. The survey also said that the West region was the most financially, emotionally and healthly prepared for retirement. Similarly, metros felt most prepared for retirement, with a retirement index of 47. Tier 2 cities exhibited a retirement index of 44, followed by Tier 1 cities at 43.
47% of urban Indians invest in retirement for financial independence
Due to heavy feeling of insecurity, 47% Indians are investing for retirement to ensure that ‘there is no need to depend on others for financial needs’, 38% invest ‘to maintain lifestyle during retirement’ ‘ 70% are retirement conscious. The corpus amount, however, 1 in 4 considers the ideal age to start the scheme after 65 years.
The survey found that 70% of the respondents were aware of the retirement fund amount, the awareness of urban India on rising costs and the financial needs to maintain their current lifestyle during retirement.
According to the survey, almost 80% of the respondents believe that they should have started investing earlier for retirement. 41% of respondents said that one should start retirement planning with others
financial responsibilities. Also, 26%, or almost 1 in 4, believe that the ideal age to start planning for retirement is when they reach 65 or their stage of second innings, and consider the gap to be sound. and widen retirement planning,
45% rely on children for retirement support
While identifying challenges to retirement investing, the survey found that 45% believe their children will support them in old age while 36% said they have sufficient family assets or other financial sources to support them during retirement. will meet their needs. About 23% said they had not even thought about retirement planning.
Only 24% consider ‘saving for retirement’ a financial priority, while 56 percent believe that savings will be exhausted within 10 years of retirement.
The pandemic has further aggravated the long-standing issues around income generation, with 56% of the respondents believing that their savings will be exhausted within 10 years of retirement. In college
24% consider ‘saving for retirement’ a financial priority.
67% of urban India consider life insurance as the most suitable product for retirement savings; Only 40 percent have invested in it.
The survey also highlighted Indians investing in various retirement products. 67% of the respondents consider life insurance as the most suitable product for retirement savings while only 40% were found to invest in it for their retirement. Bank Deposits were found to be the second most suitable product by 41%. 31 per cent preferred real estate, 26 per cent physical gold and 25 per cent preferred investing in mutual funds/ETFs/SIPs.
