74% Indians financially retirement-ready
Indians, who demonstrate impressive optimism, have lowest concern about financial hardship in retirement, according to survey done across 17 countries by Canara HSBC Oriental Bank of Commerce Life Insurance.
Indians are second best in Asia Pacific with 74 per cent ‘feeling’ adequately financially prepared to handle their retirement and 69 per cent of the respondents see themselves as being better off in their later life than their parents, the survey said.
However, 51 per cent respondents in India are worried about being able to cope financially in old age, with one in ten people in India expecting to continue working in later life to provide income for themselves, reiterating that the general optimism towards retirement must not therefore lead to complacency, it said.
India currently enjoys the fortunate position of relatively high savings rates. Further, it does not face the immediate demographic challenges of most of its peers.
However, this will not last, said Canara HSBC Oriental Bank of Commerce Life Insurance CEO John Holden.
With the looming demographic time bomb, in the long term, India is likely to face the same pressure as its peers, he said.
Over the next 30 years, a higher proportion of the population will be of working age and when they retire, India too, will face the challenges of an ageing, non-working population. As life expectancy increases, the number of years spent in retirement is expected to get greater, he added.
The study further noted that those with a financial plan for the future enjoy several benefits over those who do not.
It is called ‘planning premium’ and these benefits are both ‘hard’ and ‘soft’, including not only greater and more diverse retirement savings, but also a more positive outlook and fewer worries about later life, it said.
Individuals who undertake financial planning are not only likely to be better off in retirement, but also are more likely than non-planners to associate retirement with positive ideas such as freedom and less likely to associate it with negative ones such as financial hardship, it added.
According to the study, a key challenge in encouraging households to start planning remains the need to raise basic levels of financial literacy.
The survey had a sample size of 1,028 in India. Of this 778 men while 250 women across various age-group were surveyed.
Source: The Hindu