Wednesday, July 1, 2015
India ranks first in retirement readiness
The results of the 2015 Aegon Retirement Readiness Survey show that India ranks first in Retirement Readiness with 44% of Indian workers are confident they will retire with a comfortable lifestyle. Globally this number is just 22%.
This is the second year that India has participated in the survey and with a score of 7 out of 10, the second year that India has led the Aegon Retirement Readiness Index. People in India feel that they are more prepared for their retirement than any of the other 15 countries surveyed.
India ranks number one in the Aegon Retirement Readiness Index
(external link)Click image to enlarge
The Aegon Retirement Readiness Survey explores how increasing life expectancy is having a profound impact on the ways in which societies all over the world are planning for retirement. Of the 1,000 consumers surveyed in India, 900 are working and 100 are fully retired. The global survey covers 16,000 consumers in 15 countries.
76% of the Indian youth aged 18-24 years exhibited confidence in their finances
Speaking on the Aegon Retirement Readiness Survey, Mr. KS Gopalakrishnan, Managing Director & Chief Executive Officer of AEGON Religare Life Insurance0 (ARLI) said, "It is a happy moment to see India figuring as the best placed in terms of retirement readiness. This demonstrates the responsible and positive approach towards retirement and their keen interest in the financial products supporting the cause."
How respondents rate their financial situation over the next 12 months
Respondents from India showed more optimism about the near future and retirement readiness when compared to other developed and developing nations globally. For instance, 76% of the Indian youth aged 18-24 years exhibited confidence in their finances and expect their financial situation to improve in the next twelve months. Globally, just 52% feel the same. Interestingly, when probed further, union budgets for the year and economic factors were identified as the core reasons.
Economic improvements expected
Over 65% of Indians expect the Indian economy to improve over the next year. In comparison the number was 48% last year. And 64% of Indians expect their financial situation to improve, compared to 57% last year.
Household savings has always been a good virtue in India. This was reflected in the Aegon Retirement Readiness Survey where 51% of the Indian employees claim to be habitual savers, which was 49% last year. The report shows that India is the most prepared and financially secured nation, ahead of its BRIC counterparts - Brazil and China.
- Indians invest 63% in Life Insurance, 62% in fixed deposits, 50% in Provident Fund, 43% in gold, 42% in Property, pension funds, NPS and 40% in mutual funds.
- 56% of retired Indians currently feel very or extremely comfortable, compared to an average of just 17% across all countries surveyed.
- 52% of working Indians expect the need of financial support from family during retirement, compared to just 23% globally.
- Average Indian worker believes they are on track to achieve 71% of what they say, they need.
- 80% retired women currently provide financial support to their family members apart from their spouse/partner, compared to 30% of retired men.
- 80% young women expect their financial situation to progress next year as compared to 71% young men. This signifies that women have set their standards in becoming independent and support their families. It further underlines that the next generation will have more robust retirement plan in place as compared to the present retirees.
- Save consistently: Indians need to save more consistently for retirement in order to stay on track of their retirement income goals and to feel more secure about not working entirely during retirement.
- Consider important details before retirement planning: Financial support from and of family members during retirement need to be important considerations when planning for retirement, especially for women. They are not only more likely to be supporting family members into retirement; they are also more dependent on husbands and other family members for financial support.
- Employer contribution plays an important role: Key incentive for Indians saving more for retirement is higher employer matching contributions for retirement funds, which in turn would help employees feel more valued in the workplace.
- Diversify your portfolio: Indians have a strong appetite for different kinds of investment products, and a wider diversity of available products will encourage Indians to save more for retirement.
Written by: Aegon