Retirement planning has gained momentum post the COVID-19 pandemic, with around 67 per cent of the respondents in a survey saying they have a “retirement strategy in place”. The PGIM India Mutual Fund Retirement Readiness Survey 2023 interviewed 3,009 individuals in nine metros and six non-metro cities in India to determine people’s attitudes toward financial planning, mainly for retirement. The study shows a significant increase in the number of people with a retirement plan compared to the survey in 2020, where 49 per cent responded positively.
With inflation and financial insecurities becoming a major concern, the idea of retirement planning is catching up with people in the metros. The participants shared concerns over their spouses’ financial security, children’s education, living standards, and health post-retirement.
More About the Findings
The survey observed that the pandemic has taught people to prepare for emergencies. It said 73 per cent of respondents in Tier 1 cities, 74 per cent in government jobs, and 70 per cent from the “New Consumer Classification System” (NCCS) have a retirement plan in place. According to the survey, people started planning for retirement at around 33 years, but those who have not done so by then plan to start retirement planning in their 50s.
People’s awareness levels regarding retirement planning have increased significantly in the last few years. The study said there is a decline in the number of people not having a retirement plan from 51 per cent in the 2020 survey to a remarkably low 33 per cent in the 2023 survey.
Retirement Planning After 50
However, of the 33 per cent who do not have a retirement plan yet, 40 per cent said they do not require a retirement plan to achieve their life goals. This group of people primarily hail from ‘Tier 1’ cities and are self-employed. They fall in the income group of Rs 50,000 to Rs 75,000, with an age bracket of 51-60 years. Their numbers have also reduced from 55 per cent in the earlier survey. The rest said they would start planning after turning 50.
The survey stresses that financial planning is crucial for old age. Of those who have prepared for retirement, 68 per cent have a secured job, 69 per cent have a less stressful job, and 73 per cent said they have an alternate income source or a contingency plan for retirement.