Urban Indians Worried About Savings That Don’t Last Until Retirement, Max Life Retirement Study Finds

As the retirement market is set to grow exponentially, private life insurer Max Life Insurance aims to become a leading player in the retirement arena, said Prashant Tripathy, MD and CEO.

“We are trying to set up a retirement vertical in the company. We are going to take a holistic view of retirement. We will be focusing a lot on annuities. Over the next 4 to 5 years, our annuity portfolio is expected to grow 7 to 8 times ”, said Tripathy Activity area here.

Tripathy pointed out that Max Life is already an annuity service provider and that the pension regulator PFRDA recently approved it to become the sponsor of a pension fund manager.

Also read: Max Life Insurance Expands Buy Now, Pay On Approval to Wider Online Transaction Modes

Sharing the findings of the first edition of its India Retirement Index Study (IRIS), which maps the retirement readiness of consumers in India, Tripathy said the study found that 9 in 10 urban Indians ‘are worried about savings that do not last until retirement.

In addition, 50 percent of the more than 1,800 respondents believe that savings will be depleted within 10 years of retirement. One in four people have not even thought about retirement, and 67 percent of urban Indies consider life insurance the most suitable product for retirement savings.

Through a self-administered digital study, over 1,800 respondents were surveyed in 28 cities including 6 subways, 12 level I cities and 10 level II cities to understand urban India’s desire to lead a retirement life. healthy, secure and financially independent.

According to the study, the Urban India Retirement Index (on a scale of 0 to 100) stands at 44. The study further measures retirement readiness based on 3 components – health, financial and emotional index. The degree to which Indians feel financially secure for retirement or the “Financial Readiness Index” stands at 50, indicating concerns about financial well-being. The “Emotional Readiness Index,” with respect to community support including family and friends for emotional and social needs during retirement, scored a remarkable 62. The “Matter Readiness Index” health ”ranked lowest at 41, which became a key concern.

Retirement creates a positive feeling

Although there are positive feelings about retirement, yet 1 in 3 Indians do not want to retire. Although health and financial preparation for retirement are poor, IRIS reveals that urban Indians have a positive overall view of retirement. 68 percent associate it with positive thoughts such as more time to care for family, a hassle-free life and greater independence. Despite this, 33 percent or nearly one in three respondents do not want to retire. 19 percent said they preferred to retire between 56 and 60 years old. In comparison, 12 percent preferred to retire even later between the ages of 61 and 65.

Due to overwhelming feelings of insecurity, 47% of Indians invest in retirement to ensure that there is “no need to depend on others for their financial needs”, and 38% invest in retirement. aim to “maintain their lifestyle during retirement”.

The study found that 70 percent of those polled knew the amount of the retirement corpus, highlighting urban India’s awareness of rising costs and financial demands to maintain their current lifestyle during retirement.

According to the study, nearly 80 percent of respondents believe they should have started investing earlier for retirement. 41 percent of respondents said one should start planning for retirement along with other financial responsibilities. At the same time, 26% or almost one in four believe that the ideal age to start planning for retirement is when they turn 65 or their second inning phase, which widens the gap even further towards retirement. healthy retirement planning.

Investment in retirement products

The study also highlighted Indians investing in various retirement products. Up to 67 percent of those surveyed consider life insurance the most suitable product for retirement savings, while only 40 percent invest in it for their retirement. Bank deposits turned out to be the second most suitable commodity by 41 percent. 31 percent cited real estate as the most suitable, 26 percent cited physical gold, and 25 percent preferred to invest in mutual funds / ETFs / SIPs.

While identifying the challenges of retirement investing, the survey found that 45% believe their children will help them in old age while 36% said they have adequate family wealth or other sources. that would meet their retirement needs. 23 percent said they hadn’t even thought about planning for retirement.