Individuals consider an average corpus of Rs 65.4 lakh as ideal for retirement, revealed an ICICI Prudential Life Insurance survey. The insurance firm conducted a study titled “Is India prepared for retirement?” to understand people’s attitude towards retirement planning. The findings show that a large number of individuals view retirement as a phase of maintenance, upgradation, and growth.
Continuing with the current lifestyle into their retirement is the topmost priority, as indicated by 83 percent 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 survey said.
"Though the phase of retirement evokes positive emotions among respondents, at the same time, they are also cognizant 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,"
ICICI Prudential Life Insurance said.
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 percent 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, the survey said.
Currently, 11 percent of total income is channeled towards retirement-specific savings.
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 percent of respondents who have not invested in annuity plans so far.
Interestingly, 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 percent of their income towards retirement. They invest mainly in NPS and retirement/annuity plans, besides fixed deposits, to become retirement-ready.
Commenting on the findings of the study, Manish Dubey, Chief Marketing Officer, ICICI Prudential Life Insurance, said, “India’s retirement population is growing rapidly and is projected to show a 41 percent 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. As per the findings of the study, 65 percent of people surveyed expressed their intent of investing in annuity products as part of their retirement planning process. In contrast, only 32 percent of respondents have actually invested in annuity products, highlighting the gap in retirement planning," Dubey said.
