More Indians Are Starting To Save For Retirement Earlier But Fear The Goal Is Out Of Reach: Study

New Delhi : As technology and growth disrupt job markets, more and more Indians are starting to save for retirement at an increasingly younger age, a new study has found. According to the India Retirement Index Study by Axis Maxlife and Kantar, one in two urban Indians believe retirement planning should start with the first paycheque itself as uncertainties over the ability to stay in sustained employment over one’s working lifespan mounts.

 

However, fear of future job or earnings loss isn’t the only factor driving this trend. While the traditional retirement age in India continues to be between 58-60 years, most respondents to the survey didn’t want to wait that long. Seven out of 10 urban Indians wished to retire before the traditional retirement age if financially prepared. And half the respondents want to do it even earlier: achieve financial independence and retire before they hit 50 years of age.

 

The IRIS Index, now in its sixth year, attempts to gauge the attitude towards retirement planning and savings among working Indians. The current edition surveyed 4134 respondents across 40 Indian cities, aged 25-65, and currently employed and at least in the lower middle-income category or higher, since the ability for discretionary savings and investments is limited in low income households.

 

Interestingly, younger Indians appear to be acutely aware of the financial pitfalls of not having an adequate safety net. The average age at which respondents believed they should start thinking about retirement savings was 31 years. This fell to 29 years among Gen Z, compared with 31 years among Millennials and 34 years among Gen X+, defined as those aged 45 years or older.

 

In fact young India is changing faster than the older age cohorts, with 62 percent of Gen Z respondents saying they have already started investing for retirement. However, wishing for something and actually managing it are two different things altogether. On an average, respondents had managed to accumulate only 28 percent of their targeted retirement kitty.

 

And most feel even that number they had picked to retire on may actually prove highly inadequate, given how quickly the cost of living and maintaining a healthy life is increasing. Only one in ten respondents believed their savings funds will last their lifetime, while 39 percent believed it may not last even five years.

 

Sumit Madan, MD & CEO, Axis Max Life Insurance, pointed out that retirement remains a financial challenge for many Indians. “The finding that 82 percent of Gen X+ respondents expect to continue working for a steady income highlights a critical reality: retirement is not about reaching a certain age, but about having the financial freedom to choose what comes next. True retirement readiness should empower individuals to work because they want to, not because they need to,” he added.