Are you saving enough for retirement? Many aren't
HighlightsThe survey conducted by Grant Thornton Bharat revealed that nearly 83 percent of participants primarily rely on three retirement products: Employees' Provident Fund, gratuity, and National Pension System, indicating a lack of diversification in retirement portfolios. While over half (55%) of respondents expect a monthly pension exceeding Rs 1 lakh, only 11% believe their current investments are adequate to meet these expectations, highlighting a significant preparedness gap in retirement planning. A notable 74 percent of respondents contribute between 1 percent and 15 percent of their salary towards retirement plans, suggesting a cautious approach to savings that may be influenced by financial constraints or competing priorities.
Higher earners contribute more to
retirement products
, but the overall contribution is still relatively low for most individuals, suggesting that many people may not be saving enough for retirement, a survey showed on Wednesday.
Nearly 83 per cent of participants relied largely on three retirement products: EPF, gratuity, and NPS. 'This reliance on traditional schemes suggests limited
diversification in retirement portfolios
,' said the survey conducted by consulting firm Grant Thornton Bharat.
The results showed that more than half (55 per cent) of respondents expect a monthly pension exceeding Rs 1 lakh. However, only 11 per cent believe their current investments are sufficient to meet these expectations. 'This stark disparity highlights a significant preparedness gap that needs to be addressed through better
financial planning
and awareness,' said the report, the survey for which was conducted by the consulting firm in Aug and Sept last year.
Govt-backed plans remain the most preferred option, with 39 per cent of participants favouring such schemes. About 27 per cent of respondents showed a preference for private plans offered by reputable financial institutions. High-risk, high-return plans were particularly popular among younger respondents, with 31 per cent of participants under 25 years interested in these options. 'This finding suggests a growing appetite for risk among the younger demographic,' said the report.
With regard to the age of retirement, about 56 per cent of respondents said they plan to retire between the age of 55 and 65. 'This age range aligns with standard retirement practices in India and reflects the broader societal norms regarding work and retirement in the country,' according to the report. Younger respondents, particularly those who were 25 years or below, preferred early retirement. Among this group, 43 per cent showed a preference to retire between 45-55 years. 'Trend indicates shift in attitudes among younger employees, who may prioritise work-life balance & leisure over extended career spans,' said the report.
The majority, 74 per cent of respondents, said that they contribute between 1 per cent and 15 per cent of their salary toward retirement plans. 'This contribution range indicates a cautious approach to savings, possibly influenced by financial constraints or competing priorities,' said the report. Asked to respond about their knowledge of pension calculations, 52 per cent of respondents said they were somewhat aware of how their pensions are determined, while 30% admitted to being completely unaware.
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