Retirement Plans Hold Low Priority Among Indians

Retirement Plan

We live in an age of commercialization where we can buy anything and everything off the internet. It has become super easy to purchase your favorite items or shop to your heart’s content from the comfort of your bedroom. As consumption is quickly becoming more important than investing and saving among Indians, a recent survey shows that India might not be a nation of savers.

PGIM India MF released the Retirement Survey results that report that 51% of the total 3103 respondents had no financial plans for their retirement. In addition to that, a staggering 89% reported not having any alternative income. The numbers alone suggest that Indians are not too preoccupied with their retirement and more concerned with their immediate needs today. Money is being considered a means of leading a better life and fulfilling dreams rather than securing one’s future. The report shows a dramatic shift in the attitude of Indians towards money.

According to the survey, Indians invest and save less, thanks to the rise in credit cards, home loans, and unsecured loans. Hence, they are focusing more on their current expenses instead of planning for their future and retirement. It is also interesting to note that the respondents were asked to rate many financial goals based on priority. As per the cumulative results, retirement was found at the end of the list. Spousal security and children ranked high. Even lifestyle and fitness ranked well, which again showed the importance of a better present in the lives of Indians. Furthermore, even among the respondents who seemed to have some plan for their retirement, a lack of awareness could be witnessed regarding the precise type of financial planning they were considering.

The data also showed that as few as 1 in every 5 participants considered inflation as a factor for their retirement plans. Moreover, 48% of the respondents stated that they have no idea about the sum of money they would require to live their life comfortably after retirement. Such individuals typically rely on their investments and all-purpose funds after retirement instead of having a separate corpus to care for their needs. This approach can be rather expensive in the long run if you end up facing an emergency, presenting the risk of funds depletion in your golden years.

It is also pertinent to mention here that people still rely on low-return financial products to build their corpus. This might not be the best approach to beat inflation and could leave you with inadequate funds. The survey also reported that 41% of the respondents had focused their investments for retirement on life insurance. On the flip side, 37% prefer fixed deposits.

It is clear that although you can get a loan for all kinds of financial goals in the 21st century, retirement is still largely neglected in this arena. This means that you must be prepared with a solid financial plan when you are finally on the cusp of retirement.