‘Retirement is a pause and not a stop.’ is the current attitude of Indians towards one of the most important milestones in their lives. This was revealed in a new study to understand people’s attitude towards retirement planning.
The findings of ‘Is India prepared for retirement?‘, a study by ICICI Prudential Life Insurance, showed that retirement is viewed positively as a time full of possibilities.
Continuing with the current lifestyle into their retirement is the topmost priority, as indicated by 83% of respondents.
Over three-fifths of the respondents indicated that their retirement goals include enjoying life, staying connected with friends, travelling abroad, feeling financially secure, and having peace of mind in this new chapter of their lives.
The report said that currently 11% of total income is channelled towards retirement-specific savings. The survey also revealed that the respondents consider an average corpus of Rs 65.4 lakh as ideal for retirement.
Retirement is seen as a time when one can make a fresh start and live life the way one wants to. A large number of individuals view it as a phase of maintenance, upgradation, and growth.
Though the phase of retirement evokes positive emotions among respondents, at the same time, they are also cognisant of the need to factor in inflation and rising medical expenses while planning for their life’s new chapter. This, some felt, could impact their standard of living, the report said.
Also Read: Retirement Planning: Why Investing Early Is Important For You?
Over two-thirds of those surveyed have mentioned, they worry about inflation impacting their retirement savings, and consequently, their lifestyle. At the same time, 67% of the respondents highlighted the need to have adequate retirement corpus to take care of medical expenses if stuck with a terminal illness during their retirement.
To prepare for retirement, individuals are recognising the importance of products that are risk-free and offer guaranteed returns for life, such as annuity plans.
Annuity plans are specifically designed for retirement and provide regular life-long income for self and spouse. The survey also revealed a high interest in investing in annuity plans among 65% of respondents who have not invested in annuity plans so far.
The findings revealed the emergence of a second front, i.e. a set of individuals who are well prepared to lead a financially independent retired life. They start investing for retirement even before they turn 40 and put aside an average of 17% of their income towards retirement. They invest mainly in NPS and retirement/annuity plans, besides fixed deposits, to become retirement-ready.
Manish Dubey, chief marketing officer, ICICI Prudential Life Insurance, said, “India’s retirement population is growing rapidly and is projected to show a 41% increase by 2031. Additionally, with increasing life expectancy, a large segment of people will be looking for solutions to plan for a longer retirement.”
“In our research, we found that more individuals are now viewing retirement as an opportunity to explore their interests, follow their passions, and spend time with family and friends. Retirement planning is a long-term process, hence individuals should start saving towards this goal as early as possible. This will enable them to generate adequate regular life-long income.”
As per the findings of the study, 65% of people surveyed expressed their intent of investing in annuity products as part of their retirement planning process. In contrast, only 32% of respondents have actually invested in annuity products, highlighting the gap in retirement planning.
Retired individuals look for regular income devoid of market volatility.
ICICI Prudential Life Insurance, in association with Quantum Consumer Solutions, surveyed over 1,100 individuals to understand the consumers’ attitudes toward retirement, money, and annuity plans.
The survey provided insights from diverse perspectives, including government employees, private sector employees, businessmen, self-employed, and retirees across the age bracket of 45 to 75 years from cities with a population of more than 2 million.
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