India’s retirement population is projected to increase 41 per cent by 2031, but only 32 per cent have actually invested in retirement-catered solutions such as annuity products, according to a study by ICICI Prudential Life Insurance study titled ‘Is India prepared for retirement?’
While 65 per cent of people surveyed expressed an intent to invest in annuity products as part of their retirement planning, currently only 11 per cent of total income is being channeled towards retirement savings, the study showed.
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The survey, undertaken in association with Quantum Consumer Solutions, surveyed over 1,100 individuals including government employees, private sector employees, businessmen, self-employed, and retirees across the age of 45 to 75 years from cities with a population of more than two million.
An average corpus of ₹65.4 lakh is considered ideal for retirement, the study said, adding that “a large number of individuals view it as a phase of maintenance, upgradation, and growth.”
Over two-third of respondents said they worry about inflation impacting their retirement savings and lifestyle, and 67 per cent highlighted the need to have adequate funds to address medical expenses in case of any terminal illness during retirement. 83 per cent respondents said that the topmost priority is continuing with the current lifestyle into retirement.
For the same, individuals are recognising the importance of risk-free and guaranteed products such as annuity plans, which are specifically designed for retirement and provide regular life-long income, the study said.
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The survey also revealed the emergence of a set of individuals who are well-prepared to lead a financially independent retired life. Such people start retirement planning before they turn 40 and put aside an average of 17 per cent of their income towards retirement in products such as the National Pension System (NPS), retirement/annuity plans and fixed deposits.
Further, over three-fifth of 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.