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The PGIM India Mutual Fund

Retirement Readiness Survey 2020

explores the attitude of Indians towards retirement and what it takes for them to think about retirement planning. The comprehensive, India-specific study deep dives into understanding the changing trends, attitude and solutions explored by people when embarking on retirement planning. The Retirement Readiness Survey was conducted by Nielsen, the leaders in global measurement, and the study was commissioned by PGIM India Mutual Fund, a wholly-owned business of PGIM, the global investment management business of Prudential Financial, Inc., US.

Top 12 Highlights from the Survey

The conventional model of stable employment and retirement by 60 is increasingly outdated

People like to plan for happy outcomes and/or unknown eventualities and not for unhappy outcomes or known eventualities like retirement

Elements like break up of joint families, presence or absence of alternate sources of income and fear of dependence on children in old age are playing important roles in people’s attitude to retirement

Indians living in a joint family system feel more financially secure and this is still perceived as an important support-system in retirement

Safety and security as an association to money is shifting to fulfilling dreams and having a better life

Urban Indians are saving and investing less while allocating nearly 59% of their income to current expenses

Only 46% of private-sector employees say their employers motivate them to plan for retirement

One third of people have some form of alternate income

51% of people who have planned their retirement also have some form of alternate income

Priorities such as children and spousal security and even fitness and lifestyle ranked higher than retirement

Most Indians do not have a ‘retirement fund’ – either because they haven’t begun retirement planning yet, or they just have all-purpose funds and investments that may later be used for retirement, in case any of the other worst-case scenarios do not materialise

65% of Indians say retirement planning advice from the employer would increase their loyalty to the organization

To download the detailed ‘Retirement Readiness Report’Click Here

Retirement Party | You're invited to a retirement party where not everything is as it seems

Priorities | A woman plans her future, but something changes her mind

Key Findings

The survey focuses on some key questions including when do Indians plan their retirement and what are the possible reasons; what financial instruments are utilized; is lack of awareness undermining retirement planning; are Indians eager to learn more on retirement planning; and how employers play a vital role in raising awareness.

Some of the Key Findings are mentioned below:

Urban Indians today are saving and investing less while allocating nearly 59% of their income to current expenses

Given fewer savings, Indians are also increasingly anxious about their future

51% of respondents had not made financial plans for their retirement

89% of Indians who feel unprepared for retirement, do not have any alternative income

Barely 1 in 5 Indians consider inflation while planning for retirement

41% of respondents focused their retirement investments on life insurance, while 37% preferred fixed deposits

48% of respondents are unaware of retirement corpus, whereas 52% are aware

Indians tend to account for personal events but neglect external events when planning for retirement

On average, urban Indians aim to gather a corpus of about ₹50 lakh or about 8.8 times their current annual income

Indian financial services need to focus on retirement planning to help Indians make astute financial decisions and ease anxieties

Independence | An elderly retiree's actions are a surprise to even his son

Balloons | If our aspirations were balloons, find out which ought to fly higher

Scooter | Does your backup plan require a backup plan?

Pole Vault | Sometimes, training isn't enough. A little foresight goes a long way.

Retirement Planning Triggers

In India, planning for retirement is the last priority, family's needs and financial security come first. On average, Indians start planning for retirement only in their early thirties because of various factors such as increasing financial responsibilities and observing people around them grapple with retirement. Let’s take a look at some of these factors.

# 1 | Cultural change

Nuclear families along with shifting cultural changes is making people ensure their financial security in retirement.

# 2 | Peer influence

Observing people around them who have planned retirement and are comfortable and those who haven’t and are struggling demonstrates the upside of retirement planning.

# 3 | Self-dependence

For many the inability to see a way of living with their children because they don’t live in the same city or are in a different country makes them work on their retirement.

# 4 | health lapses

Any form or early onset of lifestyle diseases like diabetes or hypertension acts as a trigger to plan for retirement.

# 5 | rising costs

Rising household expenses accompanied by expected and unexpected financial commitments are all factors that trigger retirement planning.

Here’s how PGIM India Mutual Fund can help you achieve your Retirements Goals

Mutual fund is one financial instrument which is seen as a way to achieve retirement goals. According to the survey, among those who do have investment in mutual funds, 47% stated they had a retirement plan. These respondents had a greater awareness about unexpected and external events,inflation and rising prices that could impact their retirement plans.

Let's begin your journey towards financial freedom in retirement. First you need to calculate retirement corpus required to take care of all yours need.

Here’s a simple way to find out:

RETIREMENT READINESS CALCULATOR

The next step after calculating yours retirement corpus is to work towards achieving it. The ideal way to do this is with the Age -Linked Investment Asset Allocation Facility. The facility uses 'Rule of 100 minus age' as a simple yet powerful rule-of-thumb for asset allocation between equity and debt. The PGIM India Age-Linked Investment Asset Allocation Facility allows you to create customised path to retirement in such a way that the initial allocation favours equity and become increasingly conservative as you approach retirement. In this way, the initial years of your working life are focused more on accumulation whereas the later years are focused on conservation of capital while generating reasonable returns.

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What is Financial Wellness and why is it important?

We believe financial wellness is when individuals adopt the behaviours that result in managing their day-to-day finances, achieving important financial goals, protecting themselves against key financial risks. It’s about being prepared to handle any unforeseen financial crisis while ensuring financial security in the future.

PGIM India is dedicated to helping Indians make themselves financially secure, through a range of financial planning awareness initiatives, and through innovative products and services customised to the needs of Indians. These initiatives draw on our deep understanding of the Indian financial landscape – and of the Indian consumer - as well as leveraging insights from years of PFI’s retirement research and education in the US and other global markets. Our overall aim is to improve the financial wellness of Indians, and remove financial stress from their lives, through education and promoting the benefits of prudent financial planning. PGIM India will continue to research, analyse and engage with the ecosystem to address and improve India’s financial wellness quotient.

Partner with us on your journey towards attaining financial freedom today!

Important Disclosures: PGIM India Mutual Fund appointed Nielsen India for conducting a survey among 3103 Indian adults aged between 26-60 years (26-30: 11%, 31-40:19%, 41-50: 39%, 51-60: 31%) inclusive of both Men (85%) and Women (15%) from private (85%) and government (15%) organizations belonging to NCCS A/B (74%:26%) covering Salaried (59%), Businessmen (31%) and Self-employed professionals (10%). The survey was conducted in 15 cities (Metros: 61%, Tier 1: 39%) across India. Data was collected using Face to Face interviews. The survey was fielded between December 2019 - January 2020. The margin of error for this study is +/- 3%. The report also holds few references from the Nielsen U&A syndicated study which was conducted among 8016 Indian adults aged 22-50 years (22-30: 31%, 31-40: 38%, 41-50: 31%) inclusive of both Men (76%) and Women (24%) belonging to SEC A/B/C (45%:37%:18%). The survey was conducted in 16 cities (Metros: 57%, Tier 1: 43%) across India. Data was collected using Face to Face interviews. The survey was fielded in FY 17-18 and FY 19-20. The margin of error for this study is +/- 3%.
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