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Why are Indians better prepared for retirement than most other economies?

By Finserv MARKETS - Aug 12,2019
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Preparing for your retirement is almost like planning a vacation – most often, it never goes quite as planned. It’s not an easy task to plan – you’ll never know how retirement will turn out to be until you reach the finish line. The world is changing at a faster pace than ever before – so one can never predict with absolute certainty what provisions are needed to be made. Across the globe, people ready themselves for retirement early on. Unprecedented political, social, economic and technological change means it has never been more challenging or more important to save for a good retirement. According to the HSBC report, The Future of Retirement, 27 is the average age millennials started saving for retirement. The report provides some interesting insights: overall, 60% of working-age people in India are concerned about the declining state pensions/social provision and 67% about the growing number of older people requiring retirement funding/support. Almost two-thirds (65%) of working-age people agree that levels of national debt mean there will be less support for the elderly. One in five (20%) working-age people believe state pensions will no longer exist when they come to retire.

Why are Indians better prepared for retirement than most other economies

How do you decide where to invest money, then? How do you make sure you choose the best from the investment options?

Thus, this question – how prepared are Indians when it comes to retirement – comes at a time when the country’s retirement security is quite weak when compared to other economies. Currently, the Indian government does not offer significant social security provisions like state-sponsored healthcare and pension to its citizens, unlike in the UK where the NHS scheme of universal healthcare commands the system.

Until now, Indians were heavily relying on their children. The HSBC Study also found that while 76% of working-age people in India expect a comfortable retired life, only 33% are actually putting aside money to fund that phase of life.

This is changing: we have shorter careers, lack of social security, nuclear families becoming more common which means reduced dependence on children, increasing life expectancy is pushing Indians to focus more and more on retirement.This prompts many middle income and high-income groups to eventually resort to building and managing their own retirement fund.

What are the stats?

The same study puts forth some statistics about the magnitude of risk people are willing to take to prepare for their retirement. Turns out, there is not a particularly high appetite for risk, with only 44% of working-age people being very willing to make risky investments to ensure their financial stability and 37% being willing to risk financial losses. What could be the alternative? Where to invest money to get assured returns? Fixed deposits present as a great investment option for the relatively risk-averse investor and retirement planner. In fact, fixed deposits from Finserv MARKETS offers competitive deposit interest rates in India, starting from 8% which can go up to 8.95%. The benefit amplifies for senior citizens. Finserv MARKETS offers fixed deposit rates for senior citizens that are as high as 0.35%, over and above the existing rates.

One trend is clear: people are actively planning to provide for their retirement, or else they know things can turn gloomy. The changes in the retirement landscape are forcing people to adjust their expectations for retirement. Based on how their retirement saving is progressing, 17% of working-age people think they won’t be financially comfortable when retired.

What’s driving this improvement?

Financial literacy has a vital role in shaping how Indians view retirement planning, how and why they need to get retirement ready. For most Indians today, they need a comprehensive solution that combines insurance, financial protection and investment options that bring decent returns. 60% of working-age people think they will need to move their money from savings into investments. Coming back to how fixed deposits can be an effective solution, here’s a simple fact: fixed deposits let you take control of your investments by clubbing stability with attractive returns.

What’s more, you can choose from a range of tenures that suit your needs. To top it all, Finserv MARKETS provide a very easy process to book your fixed deposits online.

Conclusion

One of the basic steps towards retirement planning would be to outline your financial goals that address questions like what your corpus should be, gauge if it would be enough to sustain your life post-retirement and cover requirements like medical emergencies, family health coverage, amongst others. With this in place, it’s ideal to take the next step towards portfolio allocation and monitor its performance. At Finserv MARKETS, you can choose the type of investment you would like to make and complete the process online.

Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!

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