Urban Indians moved up two points on the retirement preparedness scale, from 47 points in 2023 to 49 points in 2024, according to the India Retirement Index Study (IRIS) 4.0, conducted by Max Life Insurance Co. Ltd and KANTAR, a marketing data and analytics firm. The survey, released on Wednesday, shows higher health and financial planning awareness for retirement.

Between 2021, when this annual survey was first launched, and 2024, urban Indians moved up the scale by five points, from 44 to 49, on retirement preparedness.

The 4.0 survey took responses from 2,077 people between the ages of 25 and 65 in 28 Indian cities, covering metros and Tier I and Tier II cities. Sixty-three per cent of the respondents said they invest for retirement and are less stressed about children’s education or other expenses. Forty-four per cent of them stated retirement planning should start before one turns 35, and 90 per cent of respondents above 50 regretted not having started retirement planning early.

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Ninety-seven per cent of the respondents consider life insurance a useful tool for retirement, of which 67 per cent have invested in life insurance, and 37 per cent have invested in health insurance. Despite increased awareness of retirement planning, 31 per cent of urban Indians are unsure about the corpus they would need for retirement to maintain the same lifestyle.

Prashant Tripathy, CEO and managing director of Max Life, said, “Although urban India’s retirement index has improved in the financial and health indices, 1 in 3 Indians still feel underprepared.” He adds, “Today, more urban Indians recognise the importance of starting retirement planning early, with a growing preference for life insurance as a savings tool—2 in 3 are investing in these products for retirement. Notably, urban Indian working women are taking the lead in investments, actively securing their financial futures. These trends highlight a positive shift towards proactive retirement planning and financial independence among urban Indians.”

Study Parameters

The Index sought responses on three parameters: health, financial, and emotional readiness for retirement, and measured on a scale of 0 to 100.

Key findings of IRIS 4.0:

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Score For Metro, Tier I, And Tier II Cities:

The index shows metros leading with an overall score of 50 on retirement planning, with a 51 score on financial preparedness, 49 on health preparedness, and 60 on the emotional preparedness scale. Tier I cities have an overall score of 49 and Tier II 47.

Differences Among Cities:

As per the study, the Eastern zone scored the highest, 54 points, 57 on the financial index, 51 on health, and 62 on the emotional index, indicating a higher level of retirement preparedness. The western zone followed it with an increase in the finance and health index but no change in the emotional index, fetching attention for more focus on emotional well-being in the region. It was followed by the North and South zones, respectively.

Urban Indian Working Women Better Prepared For Retirement:

The working women in urban India show growth compared to the previous year in retirement preparedness, with a score of 50, 1 point higher than men. Their retirement investment has increased by 7 per cent over the year. Around 66 per cent of women feel confident in their investments for a financially secure future, and 48 per cent of women are confident in their health and fitness in their retirement years.

Urban Indian’s Optimism For Retirement:

As per the study, around 70 per cent of urban Indians are optimistic about retirement, relating it to more time with family and no stress. At the same time, 27 per cent link it with boredom, loneliness, and declining health. Noticeably, out of the 53 per cent of respondents living in nuclear families, 93 per cent plan to stay with their children after retirement. Only 55 per cent of the respondents believe they will get support from family and friends.

Prioritising Wellness For Healthy Retirement:

More than 80 per cent of respondents prefer ‘wellness over mere prevention’, and thus, 47 per cent are confident of their fitness in retirement years. According to the study, 50 per cent of respondents have health insurance compared to 44 per cent in 2023.

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Preference For National Pension System (NPS):

According to the study, NPS has emerged as a preferred option, as more than 90 per cent find it a ‘safe and reliable’ product. Around 57 per cent prefer NPS for its returns, 40 per cent for lifelong income, and 36 per cent for its tax benefits.

Tripathy says, “This year, we also focused on Gig workers due to the rapid growth of India’s gig economy and found that they lag with lower retirement readiness. This signals a huge opportunity to bring the cohort to par with the national average through focused interventions.”

Gig Workers And (Dual Income, No Kids) Dinks:

The study included gig workers and DINKs and found that gig workers are not prepared for retirement. They scored only 46 compared to the overall 49. DINKs are at par with the overall score of 49. Gig workers feel worried about retirement and being unable to meet their families’ basic needs, and 75 per cent are concerned about their children’s future.

Key Concern:

According to the study, around 42 per cent of respondents do not proactively prepare for retirement because they rely on their family wealth, and 41 per cent look to their children for retirement expenses. This is due to a lack of awareness about retirement planning, as around 31

per cent of the respondents express a lack of financial guidance as the main reason for not preparing for retirement.

The study indicates the need to spread financial and retirement awareness among people, particularly gig workers. Around two-thirds of the urban Indian respondents are unaware and cannot spend on resources.