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90% Urban Indians Regret Not Starting Saving Early For Retirement, Says Max Life Study

The study reveals that women are at par with men in urban India in retirement preparedness while 9 in 10 urban Indians regret not starting saving early for retirement.

August 24, 2023
August 24, 2023
Urban Indians Regret Not Starting Saving Early For Retirement

Urban Indians Regret Not Starting Saving Early For Retirement

Women and men in urban India are now at par in retirement preparedness; however, nine in 10 Urban Indians Regret Not Starting Saving Early For Retirement, according to a survey of Max Life Insurance Company Ltd and KANTAR, a marketing data analytics company, on Thursday.

 

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The third edition of the India Retirement Index Study (IRIS) covered 2,093 responders across 28 cities to assess their retirement preparedness in three parameters: finance, health, and emotion, and whether they are prepared to live a healthy, peaceful, and financially secure retired life.

 

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The study reveals that urban India’s retirement index, on a scale of 0 to 100, has risen to 47, up from 44 recorded in the past two survey editions. Max Life attributed the improvement in retirement preparedness to a “significant rise in health awareness,” which moved 3 points higher to 44 in IRIS 3.0 from 41 in IRIS 2.0, it said in a press release.

 

Commenting on the findings, Prashant Tripathy, MD and CEO of Max Life, in the press release, said the progress in retirement preparedness signals the country’s stronger economic resilience. “Today’s working population will be tomorrow’s large, retired population. It is imperative to register the urgency to plan for our retirement years as India embraces longer life spans. Our study provides insight on the barriers to being retirement-ready amongst urban Indians and the advancements made by them in ensuring preparedness,” Tripathy said.

 

Soumya Mohanty, MD and Chief Client Officer, South Asia, Insights Division, Kantar, said, “The survey presents an insightful perspective into how urban Indians plan for retirement. Over the past three years, the survey has played an instrumental role in uncovering the degree to which Indians feel financially, physically, and emotionally prepared for the retired life.”

 

Here are some highlights of the survey: 

 

Outlook Towards Retirement 

 

The study reveals that urban Indians increasingly associate retirement with a stress-free life. The retirement sentiment has increased to 73, three points higher than IRIS 2.0. 

 

Seven out of 10 people related retirement with positive emotions such as “time for family”, “tension-free life”, “more independence”, and “greater prospects of luxury/travel”. 

 

Others associated it with negative emotions such as “unhealthy lifestyle”, “uninteresting life phase”, “lessened savings”, and “lack of purpose”. 

 

Focus On Fitness And Wellness 

 

Eighty per cent of urban Indians believe they will be in good health post-retirement, with 58 per cent opting for preventive health check-ups in the last three years and 40 per cent seeking annual check-ups to keep a regular check on their health. 

 

Financial Preparedness 

 

The study reveals that 1 in 3 urban Indians worry about their savings depleting within five years of retirement, and 2 out of 5 individuals haven’t started investing for retirement. Most responders believe they have enough family wealth and will be cared for by their children. Also, 9 out of 10 respondents above 50 regret not starting savings earlier for retirement. However, 1 in 2 urban Indians prioritise long-term savings at the start of their career.

 

Regarding awareness of investment products, 95 per cent said they are aware of life insurance products, while 64 per cent of urban Indians are familiar with the National Pension System (NPS), and only 16 per cent contributed to the NPS scheme. 

 

Emotional Preparedness For Retirement 

 

Despite the increasing number of nuclear households, “urban India’s dependence on family remains high when planning for retirement”, the study said. Most respondents hope to stay with their children post-retirement, “drawing focus on emotional co-dependencies during the period”. 

 

Millennials Are Better Prepared 

With a retirement index of 48 points, millennials surpass others in retirement preparedness, backed by increased awareness of financial products at 54 points.

 

Women At Par With Men In Retirement Preparedness 

 

Urban women are now at par with men in retirement readiness. Fifty-two per cent of them consider retirement planning the foremost financial priority, closely followed by 48 per cent of men. Also, 66 per cent of women hope for a secured retired life as against 60 per cent of men, reflecting a growing awareness of the importance of comprehensive retirement planning.

 

East India Demonstrates Strong Retirement Readiness 

 

With a financial preparedness Index of 53, East India is better prepared for retirement, surpassing all other regions. East India’s improved health index at 50 points complements this robust financial preparedness. 

 

Tier II Surpasses Tier I Towns In Financial Preparedness For Retirement 

 

Financial preparedness in India’s tier II towns (50 points) overtakes tier I cities (49 points). While Metros lead the way in urban India’s Retirement Index at 48 points, tier II and tier I towns close the gap in retirement preparedness with 45 points. 

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