Indians are focusing more on current expenses and failing to plan a retirement corpus for their golden years, reveals the Retirement Survey by PGIM India Mutual Fund released on 20th October, 2020.
The survey was conducted in 15 cities. About 61 per cent of participants were from metros and 39 per cent from Tier-I cities across India.
According to PGIM India Mutual Fund, the survey reveals that India’s image as a savers country may be outdated. The study also revealed that 51 per cent of people planning retirement had an alternate income to boost their retirement corpus.
Security of children and spouse, fitness and lifestyle ranks higher than retirement in their priority list. With priority shifting, urban Indians are cutting down on savings and investment. They are allocating nearly 59 per cent of their income to current expenses.
“Respondents, with an average annual income of around Rs 5.72 lakh, at an average 44 years, believed they would need a corpus of around Rs 50 lakh for retirement. It is about 8.8 times their current annual income,” the report says.
Barely 1 in 5 Indians considers the impact of inflation on returns while planning for their retirement. The Indian financial services sector urgently needs to focus on retirement planning. It is necessary to aid Indians in making thoughtful financial decisions as 39 per cent say they do not have any trusted advisor to guide them.
“Given the current economic challenges emerging in the wake of the global pandemic, the need for future financial security or financial freedom is even more pertinent today. The study has revealed a new and changing facet of our society. We will study this periodically to track and hopefully impact the issue positively,” says Ajit Menon, CEO, PGIM India Mutual Fund.