Saturday, July 13, 2024

North India least prepared for retirement, 4 in 10 yet to start investing for retired life reveals Max Life study

Max Life Insurance Company Ltd. (“Max Life”/ “Company”), in partnership with Kantar- the world’s leading marketing data and analytics company, launched the second edition of the ‘India Retirement Index Study’ (IRIS). The study assesses urban India’s readiness to live a healthy, content, and financially independent retired life. Through a self-administered digital study*, 3,220 respondents were surveyed across 28 cities comprising 6 metros, 12 Tier I and 10 Tier II cities.

At 41, North India’s Retirement Index (on a scale 0 to 100) reflects a severe lag when it comes to retirement planning, with East leading at 51, followed by West at 46 and South at 43. Health and financial preparedness stood at 36 and 47, while emotional preparedness stood at 58 indicating an increasing dependence on family, friends, and social support during retirement.

V. Viswanand, Deputy Managing Director, Max Life Insurance said, “The second edition of our retirement study reveals that while a majority look forward to retiring, they are not adequately prepared for a strong financial, emotional and healthy retirement. Despite the ageing population in India set to reach over 200 million in 2050 1 , a huge gap remains in realizing the ideal retired life. The insights gathered in North India indicate a long road ahead in terms of retirement readiness and this is an opportunity for us to drive greater efforts on the importance of early financial planning, ensuring long-term protection and security for our consumers.”

Outlook towards retirement: As per the study, North India maintained a positive outlook towards retirement with 70% associating it with thoughts such as ‘more time to take care of family’, ‘tension free life’ and ‘greater prospects of luxury/travel’. In contrast, 30% or 3 in 10 associated it with negative sentiments, with6% citing they ‘might not be very fit and healthy’ and 5% fearing ‘not having enough financial savings’.

Despite this, financial considerations ranked lower in order of priority when it came to retirement planning. Only 32% considered ‘finances’ the most critical aspect during retirement, while 60% considered ‘health’ important and 8% regarded ‘emotional support’ as most crucial.

Majority regret over not investing earlier towards retirement, fear savings will deplete: IRIS 2.0 noted that 26% consumers believed their savings will be exhausted within 5-10 years of retirement. In fact, 89%consumers over the age of 50 years regretted not investing earlier towards retirement.

However, there is a gradual increase in the awareness of the right age to start retirement planning. A significant 37% said that retirement is the first thing one should plan for when they start working, while 43% felt that one should start planning for retirement before the age of 35. Despite this, 40% have still not invested for retirement.

The top reasons driving investment in financial products included, financial support for spouse (38%), family wellbeing during medical emergencies (36%), and financial security in case of an untimely death (34%).

Glaring health gaps – less proactive about fitness and preventive check-ups
48% of North Indian are hopeful of being ‘hale and hearty’ in their retirement years however, only 35% participate in any fitness activities. Despite the pandemic bringing the importance of health and wellness to the forefront, less than half of the respondents(46%) surveyed hd taken any preventive or wellness check-up over the last three years. The remaining54% have not undergone any health check-ups in the same period.

Emotional dependence remains on family, feeling of ‘being lonely’ during retirement emerges: Despite the trend of nuclear family households continuing, dependence on family remains high when planning for retirement. At 57%, over half of North India prefer living with children post retirement. Moreover, 36% now worry about being lonely during their retirement life.

To financially protect Indians during their retirement years, Max Life Insurance announced the launch of Max Life Pension Fund Management Limited in August. Establishing the pension fund management subsidiary is a critical lever of Max Life’s growth strategy of becoming a dominant player in the retirement space. Additionally, the life insurer plans to introduce products focused on annuity and retirement, enhancing the focus on driving opportunities in the segment.

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