for retirement. In the absence of proper planning or without the foresight of a clear goal, 50% of the respondents conceded to ad hoc and convenience based investments saving only when they have additional money without the guidance of a professional financial advisor. An even more dangerous tendency among as many as 37% of the investors was their refusal to review their retirement needs before retirement. This is an alarming attitude especially in the context of increasing inflationary pressures, rising medical costs and rapidly changing lifestyles. Ironically, a majority of the investors in non-metro cities ignored inflationary effects while planning their retirement funds while more than 50% in the overall investor group were oblivious to rising medical costs.
The average retirement age in India is 59 years for which, most believe, the ideal time to start retirement planning is 39 years. However, given the enormity of the task at hand, any financial advisor would know that this benchmark is too delayed to make the maiden investments for the retirement corpus. Indeed, the earlier one starts planning for retirement, the better and easier it is. It is easy to save for retirement during the early stages of one’s career when there is no pressure to support a family and minimal health expenses. Deferment in retirement planning will imply a ‘cost of delay’ – and greater the delay, higher the costs. Even in the Max Life Insurance and Nielsen survey, 65% of the retirement investors were of the opinion that they should have started earlier and at least a third expected to fall short of funds during their retirement years.
The Necessity of Planning
The knowledge of financial resources required as against the resources available at the time of retirement is higher among those who are closer to retiring – implying late realisation.
In the Max Life Insurance and Nielsen survey, 79% of the respondents chose life insurance as the instrument for their retirement savings with as many as 54% of them owning multiple policies. Further, 64% of the non-investor group intended to invest in life insurance policies, followed by fixed