South India lags behind on retirement planning, 3 in 4 feel savings will exhaust within 10 years of retirement
- Retirement index at 43, lags in health (39), emotional (59) and financial preparedness (47) compared to East and West
- Only 1 out of 4 understand the importance of financial security post retirement
- Majority depend on emotional support from family/ friends, more than 50% wish to stay with children post retirement
- Health remains a concern, with only 51% taking regular health check ups
17 October 2022, Chennai: 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 43, South India’s Retirement Index (on a scale 0 to 100) lags on retirement planning, with East leading at 51, followed by West at 46 and North at 41. Health and financial preparedness stood at 39 and 47, while emotional preparedness stood at 59 indicating an increasing dependence on family, friends, and social support during retirement.
- 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 South India indicate the region has much ground to cover on retirement preparation, with a significant number yet to invest for retirement despite large concerns over savings being exhausted. 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, South 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, with 6% citing they ‘might not have enough financial savings’ and 5% fearing ‘might not be very fit & healthy’.
Despite this, financial considerations ranked lower in order of priority when it came to retirement planning. Only 29% considered ‘finances’ the most critical aspect during retirement, while 61% considered ‘health’ important and 9% regarded ‘emotional support’ as most crucial.
Majority regret not investing earlier towards retirement, fear savings will deplete
IRIS 2.0 noted that 44% respondents – an increase from 27% in the first edition – believed their savings would exhaust within 5 years of retirement. In fact, a sizeable 89% of the survey base 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. 45% said that retirement is the first thing one should plan for when they start working, while 28% felt that one should start planning for retirement before the age of 35. Despite this, 41% have still not invested for retirement.
The top reasons driving investment in financial products included, financial stability for children (39%), financial support for spouse (35%) and family wellbeing during medical emergencies (35%).
Major health gaps – falls behind on fitness and preventive check-ups
While 35% are hopeful of being ‘hale and hearty’ in their retirement years, only 42% regularly participate in fitness activities. Despite the pandemic bringing the importance of health and wellness to the forefront, 50% have not undertaken health checkups.
Emotional dependence on family, strong feeling of ‘being lonely’ during retirement
With the trend of nuclear family households continuing, dependence on family remains high when planning for retirement. At 54%, over half of South India prefer living with children post retirement with 36% worrying 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.
About India Retirement Index Study
India Retirement Index Study is an annual retirement study by Max Life Insurance. The survey aims to understand the retirement readiness of Urban India, with insights into awareness, aspirations and challenges of consumers during retirement and it’s planning. India Retirement Index is the degree to which Indians feel prepared for tomorrow’s retired life on a scale 0 to 100. It is based on how prepared India is for a healthy, peaceful & financially independent post-retirement life.
About Max Life Insurance (www.maxlifeinsurance.com)
Max Life Insurance Company Limited is a Joint Venture between Max Financial Services Limited and Axis Bank Limited. Max Financial Services Ltd. is a part of the Max Group.
Max Life offers comprehensive protection and long-term savings life insurance solutions, through its multi-channel distribution including agency and third-party distribution partners. Max Life has built its operations over two decades through a need-based sales process, a customer-centric approach to engagement and service delivery and trained human capital.
As per public disclosures and annual audited financials for FY2021-22, Max Life has achieved a gross written premium of INR 22,414 crore. As of 31st March 2022, the Company had INR 1,07,510 crore of assets under management (AUM) and a Sum Assured in Force of INR 11,74,515 crore.
For more information, please visit the Company’s website at www.maxlifeinsurance.com
About Kantar
Kantar is the world’s leading marketing data and analytics company. We have a complete, unique and rounded understanding of how people think, feel and act; globally and locally in over 90 markets. By combining the deep expertise of our people, our data resources and benchmarks and our innovative analytics and technology, we help our clients understand people and inspire growth.
For more information, please visit www.kantar.com
[1] https://blog.forumias.com/elderly-population-in-india/
* Self-Administered Digital Study (Recruited Offline; Responded Online)
