North Indians Want To Retire Before 50, But Are Their Savings Enough?

Retirement may still seem a long way off for someone in their 30s or 40s, but the idea of giving up work early is becoming increasingly attractive. The challenge is figuring out whether one's savings can support that decision. After all, leaving a regular job is one thing; managing expenses, healthcare costs and everyday needs for the next 25-30 years without a monthly salary is quite another.

A new study by Axis Max Life Insurance suggests that this is a concern for a large number of people in North India. While 74 per cent of respondents said they would like to retire before the traditional retirement age if their financial needs were taken care of, their savings may not be enough to support that ambition. Nearly half (49 per cent) want to become financially independent and retire before turning 50.

The sixth edition of the India Retirement Index Study (IRIS 6.0), conducted by Axis Max Life in partnership with Kantar, found that respondents had accumulated just 26 per cent of their target retirement corpus, on average. More tellingly, only 26 per cent expect their savings to last for 10 years or longer. A year ago, 38 per cent were confident of their corpus lasting that long.

The findings suggest that while early retirement is gaining appeal, confidence about having enough money for the years ahead is taking a hit.

North India recorded an overall retirement index score of 47, compared with 48 in the previous edition and the national score of 49. It also ranked lowest among the four regions. Its financial preparedness score improved marginally from 48 to 50, but remained below the national average of 52. The health preparedness score, meanwhile, fell from 46 to 44, while emotional preparedness slipped from 55 to 54.

Retirement Planning Still Starts Late

More people are putting money aside for their retirement, but the numbers suggest that many are not starting early enough. About 68 per cent of respondents in North India said they had begun investing for retirement, up from 64 per cent in the previous survey. The national figure is 70 per cent.

Yet, just 39 per cent believe retirement planning should begin with the first salary. This is better than last year's 35 per cent, but considerably below the national average of 50 per cent. On average, respondents feel that 33 is the right age to start thinking about retirement savings. Across India, the figure is 31.

There is also some uncertainty about how much money will actually be required. The share of respondents who said they knew the corpus needed to maintain their current lifestyle after retirement fell from 70 per cent to 64 per cent.

At the same time, expectations are changing. Around 32 per cent now believe they will need more than Rs 1 crore for a comfortable retirement, compared with 21 per cent in the previous survey. This was the highest proportion among the four regions.

Money Is Not The Only Worry

The study also brings out concerns that cannot be addressed simply by building a larger investment portfolio. Health is one of them. Only 70 per cent of respondents expect to remain fit and healthy after retirement, down from 74 per cent last year. Just 61 per cent said they undergo preventive health check-ups regularly or occasionally. Regular physical activity was reported by 39 per cent, against the national average of 41 per cent.

Loneliness appears to be an even bigger concern. As many as 81 per cent of respondents worry about being lonely after retirement, the highest across all four zones and well above the national average of 74 per cent. Confidence in having family and friends to fall back on has also weakened. The proportion feeling secure about receiving such support declined from 88 per cent to 84 per cent.

Uncertainty about the world outside their homes is adding to these worries. Some 85 per cent of respondents fear that changing environmental conditions could affect their retirement, while 83 per cent are concerned about geopolitical tensions. The latter figure is the highest among the four zones.

Anurag Gupta, Chief Business Officer and Head of Retirement at Axis Max Life, said the fall in confidence about corpus longevity underlined the importance of starting early and investing regularly. He also pointed out that retirement preparation should cover health and emotional wellbeing, not just finances.

For those hoping to leave the workforce early, the study offers a reality check. A retirement plan cannot be built around the age at which someone wants to stop working alone. It must also account for how long they may live, the cost of healthcare and the kind of life they want to lead after retirement. Having enough money for the first few years is one thing; making it last through retirement is quite another.