Life insurance good for retirement savings, feel 67% Indians

New Delhi: Fewer people are holistically prepared for a post-retirement life, with urban India standing at a rank of 44 on the Retirement Index. The study calculates retirement preparedness on the basis of health, financial and emotional index and that on the 'financial preparedness index', India stands at rank of 50, sparking concerns over financial wellbeing.

On the lines of the survey, private health insurance brand Max Life in partnership with Karvy Insights, on Tuesday launched 'India Retirement Index Study' (IRIS) to map the retirement preparedness of consumers in India. As per its survey outcome, 47 per cent Indians are investing for retirement to ensure there is 'no need to depend on others for financial needs', whereas 38 per cent are investing with the aim to 'maintain lifestyle post retirement'. The survey also states that nearly 1 in 3 respondents do not want to retire.

Prashant Tripathy, Managing Director and CEO, Max Life Insurance said, "As life expectancy rises and health patterns shift, retirement is set to become an important priority for a sizeable part of the population. Accentuated by the pandemic, the recent economic climate witnessed lower wage growth, financial uncertainty and job losses, resulting in further straining individual, household incomes. It is therefore important to understand the sentiment and challenges of our consumers today as we prepare for tomorrow."

The survey was prepared with over 1,800 respondents spread across 28 cities to record urban India's readiness on a post-retirement life. The retirement focused survey aims to reveal the state of urban India's preparedness to lead a healthy, peaceful, and financially independent retired life.

The findings reveal that more respondents were aware of retirement plan with 80 per cent of the participants saying should have started investing earlier towards retirement, 41 per cent of those said one should start planning for retirement along with other financial responsibilities.

However, 45 per cent of respondents believe their children will aid them in the old age whereas 36 per cent said they have adequate family wealth or other financial sources which will cater to their needs during retirement. An alarming 23 per cent said they are yet to think about retirement planning.

The report suggests that while men had an overall retirement preparedness index of 44, women were almost at par with retirement preparedness index of 43. On investment options for post-retirement financial backing, 67 per cent respondents consider life insurance as the most suitable product for retirement savings whereas only 40 per cent were found to be investing in it for their retirement.