The Aegon Retirement Readiness Index (ARRI) of India has shown a steady uptrend from 7.0 in 2014 to 7.3 in 2016. This indicates that Indians are making gradual but certain progress in their readiness for retirement.
The survey took into account feedback from 1,000 Indians. Of these, 900 are working and 100 are fully retired.
The survey also revealed that a whopping 86% of Indians agree that the government must encourage employers to automatically enroll their employees into a retirement plan.
The report points out that subgroups like women, part-time workers, low income earners, and the less educated are vulnerable and less able to achieve retirement readiness. As such they would particularly benefit from more structured arrangements in terms of enrollment in workplace retirement plans.
Not relying on state support
While Indians believe that retirement planning is a shared responsibility, it must also be noted that a mere 25% expect their retirement income to come from government funding compared to 46% globally. Indian workers and retirees expect to fund over two-fifths of their income in retirement through their own savings and investments.
Speaking about the Aegon Retirement Readiness Survey 2016, Mr. K.S. Gopalakrishnan, Managing Director & Chief Executive Officer of Aegon Life Insurance said, "It is a proud moment that India has clinched the highest position in Retirement Readiness globally. The survey has brought out the positive attitude that Indians have towards savings and retirement planning."
The ARRI survey sought responses to six questions – three broadly attitudinal and three broadly behavioral in nature. The objective was to gauge the participants' sense of personal responsibility, level of awareness, financial understanding, retirement planning and income replacement - how confident a person is that they will achieve the level of income they require in retirement.
Confidence about retirement income is high
These six variables have inched higher since 2014, with income replacement showing the most noticeable increase. The income replacement variable has risen to 50% in 2016 from 43% in 2014, indicating the positive sentiment among Indians about achieving 75% or more of the income they require for a comfortable retired life.
Aegon conducted a series of surveys across 15 countries and discovered that Indians are most prepared and confident of living a comfortable lifestyle after retirement.
You may be a couple of years or decades away from your retirement, but it's imperative to plan and save for retirement, much in advance. Planning for retirement may seem an arduous task, but if done properly, will make your retirement stress-free and enjoyable!
Creating the right retirement plan is not just about being disciplined about money. How you finalize your asset allocation strategy will ultimately decide whether you will have a financially secured life after retirement. Combine prudence with flexibility to come up with the right asset allocation strategy for your future.