India has got the first place in being retirement ready in a global survey even ahead of countries like US, the UK and China. However, the survey also revealed that Indians also thought that they are not exclusively ready in terms of having the required financial corpus to meet their anticipated retirement needs. On top of this, a huge majority of people are in a position where they will have to still support their family financially, other than their spouse even after retirement.
While many Indians think that they are ready for their retirement, the actual numbers tell a different story that their savings/ investments are insufficient. It is not just the people who are nearing their retirement but even young working people were not sure that they will be to accumulate enough corpus for their. This might be because of erratic savings habits and not saving and investing wisely. Shockingly only 51% of the people who were surveyed said they had regular saving habit.
When it comes to building retirement funds, almost 31% of working Indians depend highly on the employee pension plan that had the employer contributions. Nearly 60-70% of Indians still depend mainly on savings accounts, fixed deposits and life insurance policies for building their retirement funds when compared to what people use for building their retirement corpus in other countries. People also look into investing in gold and real estate considering the safety of their investments. However, people turn to these options because of the ongoing apprehensions inflation and its impact on savings and investments.
Indians use the savings accounts to a much larger extent than what people in other countries do. This limits their ability to make more income from their savings and investments. About 61% Indians use their savings accounts and fixed deposits to save for retirement. Though about 80% Indians believe that the National Pension System (NPS) is a safe a good option to save for retirement, only 42% Indians are using NPS as a means to build their retirement funds. Almost 60% Indians still widely use fixed deposits despite the fact that NPS schemes provide double-digit returns compared to fixed deposits.
Indians are actually not on the right track with the methods that they are using to save for their retirement. This is because Indians are risk antagonistic and prefer safer means even though the returns are low as compared to investing riskier high returns options. Wealth managers and financial planners suggest that Indians need to improve their savings and investment choices to huge extend to be retirement ready.
It is recommended that Indians saving for their retirement need to be more consistently and also look into other investment options such as mutual funds to get on track for retirement goals.