Western India retirement index dips to 46, health remains an area of concern: Max Life's survey

Max Life Insurance Company on Friday, September 22, unveiled the findings of the third edition of its retirement survey, India Retirement Index Study (IRIS), conducted in partnership with KANTAR, a marketing data and analytics company. According to the IRIS 3.0 findings, western India’s Retirement Index (on a scale of 0 to 100) has dropped from 47 in IRIS 1.0 to 46 points now.

In contrast, all other regions have demonstrated a positive index movement in retirement preparedness - northern India’s index rising from 41 to 44 points; eastern India’s index significantly moving from 44 to 52 points, and southern India’s index improving from 40 to 46 points.

V Viswanand, Deputy Managing Director, Max Life said, “The findings of the third edition of our annual retirement study have shed light on the unique retirement challenges confronting Western India’s urban population. This zone in particular feels least secure in retirement, with 9 out of 10 individuals regretting not initiating their retirement planning earlier. With the only negative index movement amongst all zones, the region needs urgent interventions to drive across the criticality of timely retirement planning. Via proactive savings and investing, western India can realign its focus and ensure due importance towards pertinent retirement preparedness.”

Despite the aspirations of a comfortable retirement, western India demonstrates the least sense of security towards a peaceful retirement life compared to other zones. Additionally, only 6 in 10 individuals in the region are aware of the required funds needed to maintain their current lifestyle during retirement, highlighting a gap in financial knowledge. Moreover, nearly 8 in 10 respondents believe the retirement age in India should be extended beyond 58 or 60 years, indicating a growing concern of longevity risk.

As per IRIS 3.0 findings, an overwhelming 90 percent respondents wish they had initiated retirement savings earlier, highlighting the significance of proactive financial planning. The aspiration of a stress-free retirement life has experienced a significant decline in the region, plummeting from 19 percent in IRIS 2.0 to 10 percent in IRIS 3.0. This drop reflects a growing realization of the challenges associated with retirement preparedness in the region, and the need for robust planning to ensure financial security and peace of mind during one’s golden years.

While there is a significant rise (36 percent to 45 percent) in individuals who have undertaken health check-ups 2 or 3 times in the last 3 years, there is a stark decline (from 28 percent to 17 percent) in those with regular health check-ups, indicating how despite a commendable uptick in health check-ups, there is room for improvement in sustaining regular health monitoring. This shift in behavior has led to a notable decrease in the proportion of people who feel confident about being fit and healthy during their retirement, dropping from 47 percent to 32 percent as per IRIS 3.0.

Notably, 4 in 10 respondents in western India are resorting to health-treatment-related factors, such as doctor-advised regimes, regular medications, and ad-hoc medical requirements, indicating a willingness to address health concerns proactively.

The Financial Index has seen a gradual increase, climbing from 48 in IRIS 2.0 to 50 in IRIS 3.0, suggesting an improved understanding of financial matters among respondents. Also, there has been a surge in awareness regarding government-backed financial schemes with the awareness of the Atal Pension Yojana has seen a significant increase, rising from 45 percent in IRIS 2.0 to 58 percent in IRIS 3.0. The awareness of annuities has also grown, moving from 34 percent in IRIS 2.0 to 40 percent in IRIS 3.0.

In the zone, life insurance remains the most well-known financial products, with awareness levels at 97 percent. While life insurance ownership remains relatively stable (72 percent compared to 73 percent in IRIS 2.0), there has been an increase in ownership of assets such as real estate and gold. Additionally, NPS ownership has witnessed an uplift. Unit Linked Insurance Plans (ULIP) and traditional insurance ownership have also increased considerably, indicating a diversified approach to financial planning for retirement.

Emotional dependence on children grows in Western India's retirement trends

Emotional dependence on children as a source of support during retirement is a prevailing sentiment among individuals in western India. The IRIS 3.0 findings reveal a noticeable increase in the region’s inclination to rely on their children for care and financial assistance during retirement, with this sentiment rising from 21 percent in IRIS 2.0 to 27 percent during IRIS 3.0. However, it's noteworthy that only 42 percent of respondents express a sense of security regarding family support during their retirement years, which is the least across all regions.

Furthermore, it is striking that one in every two individuals surveyed wishes to stay with children during retirement. This suggests a strong desire for close familial bonds and possibly indicates the belief that living with children will provide both emotional and financial support as they age.