With assured pensions becoming a thing of the past, Retirement Planning has become an imperative for every Indian. A higher cost of living, the advent of aspirational lifestyles, evolving socio-cultural equations and volatile economic dynamics all contribute to necessity of planning for retirement as soon as one starts earning. However, a recent study by Max Life Insurance and Nielsen on Retirement Usage & Attitude covering 1091 male respondents in the 31-50 years age bracket across the country reveals that even though Indians realise the importance of retirement planning, a majority of the working population is yet to embrace the concept. Evidently, there is an urgent need for working people to wake up to the reality that in the absence of retirement planning would have a negative impact on their lives.
Retirement: Perceptions v/s Reality
The Max Life Insurance and Nielsen survey reveals that retirement, as a phase of life, has more positive connotations than negative, with a majority of respondents looking forward to new beginnings filled with more independence compared to their working years, peace of mind and the opportunity to live life on their own terms. While 10% of the respondents anticipate greater financial independence – believing they will have more money at their disposal during this phase – only 1% accepted that their retired years could imply financial struggle. Paradoxically, even though 75% realise that their routine expenses are likely to increase post-retirement, the majority did not have a plan to counter the rise in expenditure.
Merely 28% of the respondents of the Max Life Insurance and Nielsen study have started planning for retirement, a majority of which have invested in life insurance policies while the others have opted for fixed bank deposits, realty and gold among others. Only 4% of the entire respondent group had invested in a life insurance pension plan which guarantees monthly returns. OPTION 1: From the remainder 72%, a huge 60% do not have any back-up plan while the remaining plan to rely on their existing wealth or children
The Dawn of Realization
It is not sufficient to merely save