75% of Indians lack retirement plan, most skip professional advice: Survey

They start saving at age 39, holding a median corpus of Rs 28 lakh against a goal of Rs 1 cr

Most Indians nearing retirement believe they are financially prepared but lack a structured plan, according to a new survey. This highlights a mismatch between their confidence and the reality of rising health care costs and inflation.

 

The survey, conducted by 1 Finance Magazine among 1,218 Indians aged between 40 and 60, found that 75.5 per cent of respondents do not have a detailed retirement plan. Yet, more than 61 per cent of those without a proper plan still expect to retire comfortably.

 

The findings suggest that many Indians treat retirement as a lifestyle milestone rather than a financial challenge that requires long-term preparation.

 

 

Confidence remains high despite weak planning

Only 24.5 per cent of respondents said they had a detailed retirement strategy. More than half described their planning as “rough” or “basic”, while 23 per cent admitted they had no plan at all.

 

The survey found that many households still view retirement emotionally. Nearly 48 per cent associated retirement with spending time with family, while others linked it to relaxation and travel. Fewer than three in ten respondents connected retirement with financial preparedness or wealth creation.

 

This gap between emotional expectations and financial planning is becoming a serious concern because many households may underestimate how much money they will actually need after retirement.

 

Animesh Hardia, editor-in-chief of 1 Finance Magazine, said many Indians suffer from what he described as “confidence anaesthesia”, where people assume things will work out despite inadequate preparation.

 

According to the survey, many respondents start retirement-focused saving relatively late. The median age at which people begin actively saving for retirement is 39, leaving only around two decades to build a sufficient retirement corpus before the typical retirement age of 60.

 

The retirement corpus shortfall is substantial

 

The numbers reveal a major savings gap.

 

The median respondent currently has a retirement corpus of Rs 28 lakh, while the median target corpus stands at Rs 1 crore. This translates into a 3.6-fold shortfall.

 

The gap becomes significantly wider for higher-income households. At the 75th percentile, respondents reported having Rs 50 lakh saved against a target corpus of Rs 4 crore, implying an eight-times gap.

 

The survey also showed a sharp divide between metro and non-metro households:

 

• Metro residents reported a target retirement corpus of around Rs 2 crore
• Non-metro respondents targeted about Rs 52.5 lakh
• The gap between the two groups is 3.8 times

 

This difference is far larger than the income gap between metro and non-metro respondents, suggesting that many non-metro households may be underestimating future expenses, inflation and longevity risks.

 

Health care and longevity risks remain underestimated

Health care emerged as the single biggest retirement concern for respondents, with 82 per cent identifying it as a major worry.

 

However, the survey found that most people are not planning adequately for medical inflation or longer life expectancy.

 

Nearly 58.5 per cent of respondents expect their retirement savings to run out before the age of 80. But urban Indians aged 60 are expected to live another 22 to 24 years on average, taking life expectancy well beyond 80.

 

This creates a significant longevity risk, particularly because healthcare inflation in India is estimated at 12-14 per cent annually, much higher than general inflation.

 

The report highlighted that a hospitalisation costing Rs 5 lakh today could cost between Rs 16 lakh and Rs 19 lakh by the time a person reaches 75.

 

At the same time, close to 60 per cent of respondents expect their expenses to decline after retirement, a belief that may not hold true once healthcare costs are factored in.

 

Traditional products still dominate retirement savings

Indian households continue to rely heavily on traditional savings instruments.

 

The survey found that fixed deposits and mutual funds were equally popular, with 61.3 per cent of respondents using each for retirement savings. Gold and real estate followed at 47.3 per cent each.

 

However, only 22.7 per cent reported investing through the National Pension System, despite its long-term retirement focus and tax benefits.

 

The findings suggest that many households still treat retirement investing as a collection of familiar products rather than a structured portfolio aligned to future cash-flow needs.

 

Most Indians still avoid professional financial advice

 

Nearly 77 per cent of respondents said they do not consult financial professionals for retirement planning. Instead, family and friends remain the most common source of financial guidance.

 

Even among higher-income respondents earning above Rs 25 lakh annually, many still preferred managing retirement planning on their own.

 

The report argued that the issue is not just the shortage of advisers but also the lack of trust in professional financial planning services.

 

For many Indian households, retirement planning still begins too late, remains too informal and depends heavily on assumptions about family support, property income or continued employment after retirement.

 

The survey found that 64.3 per cent of respondents expect to continue working after retirement, while nearly one in four respondents admitted they had no fallback plan if their retirement savings prove insufficient.