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In a survey on retirement planning, 29% of participants named price increases as a major motivator for starting to save for retirement. This is due to India's growing inflation rate.
According to the second iteration of the "India Retirement Index Study" (IRIS), which Max Life Insurance and the marketing data and analytics firm Kantar jointly launched, this is the case. The percentage is greater than the 18% of respondents to the initial survey, the findings of which were released in December 2021, who expressed this sentiment.
In the 2022 study, 3,220 respondents were polled digitally from 28 cities, including 6 metros, 12 Tier I cities, and 10 Tier II cities.
The study's results include:
Dependence on family: When considering retirement, India continues to place a strong value on family. One in two urban Indians, or 54%, prefer to live with their offspring after retirement. In addition, 26% of Indians, up from 21% previously, worry about becoming lonely in their latter years.
The Retirement Index, which measures readiness, was 44 (on a scale of 0 to 100), reflecting a one-year delay in urban India's response to retirement preparation. While emotional preparedness saw a considerable decline from 62 to 59, indicating growing reliance on family, friends, and social support throughout retirement, physical preparedness and financial preparedness were at 41 and 49, respectively.
Women scored 44 on the overall retirement preparation assessment, compared to 45 for males. Men seemed to be more financially worried than women, even though the score remained low for both sexes. Compared to women, who were less concerned about managing luxury spending, 53% of males were concerned about saving for retirement, compared to 49% of women. Additionally, compared to 24% of women, 27% of males expressed increased emotional distress about loneliness during retirement.
Savings running out: Within ten years of retirement, 59% of respondents (up from 56% previously) predict that their savings will be depleted. In fact, 86% of respondents over the age of 50 regret not beginning their retirement investments earlier.
Indians living in urban areas generally have a good attitude regarding retirement. 70% of people link it to good things like "more time to take care of family," "a life without stress," and "more opportunities for luxury/travel." In contrast, 30%, or three out of ten, had negative feelings about retirement, with 6% citing that they "may not be very fit and healthy" and 5% expressing concern about "not having enough financial savings."
Priorities: When it comes to retirement planning, financial considerations come in last on the priority list. For 59% of respondents, their health is the most important part of retirement. Finances are deemed to be most significant by 31%, while emotional support is deemed to be most vital by 10%.
Awareness: The knowledge about when to begin retirement planning is gradually growing. Significantly, 44% of respondents believe that one should start saving for retirement as soon as they start working, while 33% believe that this should happen before the age of 35.
Lack of action: 37% of respondents still haven't purchased any retirement-related financial goods. 39% of respondents think their children will take care of them, 23% are unsure of where to begin, and 42% have not invested for retirement because they believe they have enough family wealth to fall back on.
Health: Seven9% of Indians, or four out of five, believe they will be "hale and hearty" when they retire. Only 40% of people engage in any fitness activity, though. Only half of those surveyed (55%) had undergone any preventative or wellness check-up during the previous three years, despite the COVID-19 pandemic raising awareness of the value of health and wellness. The remaining 45% had not received any health examinations during that time.
According to Mr. Prashant Tripathy, managing director and CEO of Max Life, "India's old population is anticipated to grow by about 41% to 194m by 2031 as the country's life expectancy increases and health patterns change. In India, the retirement age is likewise being reviewed to better reflect the country's rising life expectancy. The solid and well-represented study demonstrates that Indians are also realizing the necessity to plan for retirement early as industry and the larger ecosystem take steps in a positive direction. However, the knowledge has not yet been followed by proactive saving and investing.
All Indians must adopt the "earlier the better" concept and begin planning for retirement at an early age, he said.
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