- Date : 23/02/2022
- Read: 4 mins
Urban Indians are not ready for retirement. What could be the reason behind this?
Max Life Insurance Company Ltd., in collaboration with Karvy Insights, published the first edition of its 'India Retirement Index Study', which maps consumers' retirement readiness in India. The goal of the retirement-focused poll is to find out how prepared urban India is to live a healthy, pleasant, and financially independent retirement life.
According to the report, the Retirement Index in urban India (on a scale of 0 to 100) is 44. The survey also assesses retirement readiness based on three factors: health, finances, and emotional well-being. The 'financial preparation index,' which measures how financially secure Indians feel for retirement, is 50, signalling financial concerns. The 'emotional preparation index,' which measures community support for emotional and social requirements after retirement and includes family and friends, had a high score of 62. The 'health preparation index,' which ranked 41st, has emerged as a major source of concern.
1800+ respondents were questioned across 28 locations, including 6 metros, 12 Tier I cities, and 10 Tier II cities, as part of a self-administered digital study to better understand urban India's readiness to live a healthy, secure, and financially independent retirement life.
Also read : How to choose the right insurance company?
URBAN INDIA'S RETIREMENT PERSPECTIVE
- Although retirement elicits favourable feelings, one-third of Indians do not wish to retire. Even though health and financial readiness for retirement is low, IRIS finds that urban Indians have an optimistic attitude toward retirement. It is associated with good sentiments such as more time to spend with family, hassle–free-living, and greater freedom by 68 per cent of people. Despite this, over one-third of respondents (33%) do not want to retire. They prefer to retire between the ages of 56 and 60, according to 19 per cent of those polled. By contrast, 12 per cent preferred to retire even later, between the ages of 61 and 65.
- The West Zone and Metros are the most prepared for retirement, whereas the North and South Zones are the least prepared. The West zone, with a retirement index of 49, surpassed other regions in terms of total retirement readiness. With a retirement index of 45, the East was a close second, while the North and South were also at 42. According to the survey, the West zone was the most financially, emotionally, and physically prepared for retirement.
INVESTMENT ATTITUDE IN RETIRED PERSONS
- 47 per cent of urban Indians invest in retirement to ensure financial independence, with 38 per cent investing to maintain a lifestyle during retirement.
- 70 per cent are aware of retirement corpus amount, but 1 in 4 believe the ideal age to start planning is after 65 years.
- According to the study, 45 per cent of respondents feel their offspring will help them in old age, while 36 per cent believe they have sufficient family money or other financial resources to meet their retirement demands. Concerningly, 23% stated they haven't even considered retirement planning.
- Only 24% consider retirement savings' to be a financial priority, despite 56% expecting that savings will be depleted by 10 years of retirement.
- Life insurance is considered the most ideal product for retirement savings by 67 per cent of urban Indians; yet, only 40% had invested in it.
- The poll also revealed that Indians are investing in a variety of retirement products
Max Life Insurance, in collaboration with Karvy Insights, conducts annual retirement research in India. The survey, which was launched in December 2021, intends to better understand Urban India's retirement readiness by providing insights into consumer knowledge, ambitions, and obstacles during retirement. India Retirement Index is the degree to which Indians feel prepared for tomorrow’s retired life on a scale of 0 to 100. It is based on how prepared is India for a healthy, peaceful & financially independent post-retirement life.
Also read- Why you need to plan early to retire rich.