Millennials are better prepared for retirement than persons from other age brackets, a new survey has found.

More than two-thirds of millennials feel secure with their current savings/investments for retirement—significantly higher than other age brackets, the third edition of the India Retirement Index Study (IRIS) showed.

IRIS 3.0 was conducted by Max Life Insurance in partnership with KANTAR.

IRIS survey assesses urban India’s preparedness to live a healthy, peaceful, and financially secure retired life. For the digital study, 2,093 respondents were surveyed across 28 cities in India.

Millennials, who were surveyed for the first time in IRIS 3.0, have surpassed others in retirement preparedness, backed by heightened awareness of financial products at 54 points.

India’s retirement preparedness

The study reveals that urban India’s retirement index (on a scale of 0 to 100) has risen to 47, a significant upward movement from 44 witnessed across the past two editions. The retirement index comprises three sub-indices mapping - health, finance, and emotion, and indicates an uptick across all three parameters. The improvement in retirement preparedness comes at the back of a significant rise in health awareness, which has moved 3 points to 44 (a three-year high) in IRIS 3.0, from 41 in IRIS 2.0.

Prashant Tripathy, Managing Director & CEO, Max Life said,“This edition shows progress in India’s retirement preparedness, which also signals the country’s stronger economic resilience. Today’s working population will be tomorrow’s large, retired population. And it is imperative to register the urgency to plan for our retirement years as India manages its aging population and embraces longer lifespans. Our study provides insight on the barriers to being retirement-ready amongst urban Indians, as well as the advancements made by them in ensuring preparedness.”

The IRIS 3.0 study reveals that nearly 1 in 3 urban Indians are worried about their savings depleting within five years of retired life. 

Equally alarming is that 2 out of 5 individuals have not started investing for retirement yet. A significant majority believe that they have enough family wealth, and/or be taken care of by their children, which poses a disproportionate barrier to retirement planning. 

In fact, as high as 9 out of 10 respondents above the age of 50 years regret not starting savings earlier for retirement. However, as a silver lining, 1 in 2 urban Indians favour prioritising long-term savings planning at the start of their working careers. Also, a majority of respondents (38 per cent) believe that one should start retirement planning before 35 years of age.

As investment preferences for retirement goals, life insurance products lead the way with 95 percent awareness and 75 percent ownership levels. Additionally, the IRIS 3.0 study revealed that while 64 percent of urban Indians are familiar with National Pension System (NPS), only 16 per cent invest by making contributions. 

Women close the gap with men

IRIS 3.0 reveals that urban Indian women are now at par with men in retirement readiness. Notably, 52 per cent of women consider retirement planning the foremost financial priority, closely followed by 48 per cent of men who share the same view. Also, 66 per cent of women are hopeful of a totally secure retired life as against 60 per cent of men. This heightened positive outlook among women reflects a growing awareness and recognition of the importance of comprehensive retirement planning.

Emotional readiness for retirement

Despite the trend of nuclear households continuing (53 per cent) – urban India’s dependence on family remains high when planning for retirement. Per the survey, majority of the respondents hope to stay with their children post-retirement, drawing focus on emotional co-dependencies during the period.

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