Retirement planning has taken a major hit this year in India as the percentage of savings towards retirement has shrunk from 45% in 2022 to 38% in 2023, according to a recent annual survey report by Bankbazaar.
The biggest losers here were women, who have rolled back on retirement for other savings. Only 34.3% women are saving and investing towards retirement compared to 48.45% women last year. For men, this number is more or less constant, as 40.1% men continue to prioritise retirement planning compared to 41.86% last year.
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The percentage of women without a retirement corpus has worryingly risen from 32% in 2022 to 43% in 2023. In case of men, there has been a marginal drop in this figure, from 46% in 2022 to 45% in 2023.
Data indicates that serious retirement saving starts typically in late 20s-early 30s. In 2023, close to 9% of respondents said they are working towards a corpus of Rs.50-Rs.75 lakh, closely followed by another 8% who are working towards a retirement corpus of Rs.75 lakh-Rs.1 crore.
In the corresponding corpus bands, these figures are significantly lower than last year when 18% were working towards a corpus of Rs.50-Rs.75 lakh while 17% were working towards a corpus of Rs.75 lakh–Rs.1 crore.
This year, MoneyMooner women (22%) are the largest cohort amongst all that are working towards a retirement corpus of Rs.50–75 lakh. Also, in two out of three cohorts, a higher percentage of women (Early Jobbers – 7%, MoneyMooner – 13%), are working towards a corpus of Rs.1.5–2 crore, as compared to men in the corresponding cohorts (Early Jobber – 6% & MoneyMooner – 9%).
Speaking of the investments preferred for retirement planning, the choices of the three age cohorts aligned. 67% people chose savings bank accounts as a key financial product for retirement planning, followed by fixed deposits and mutual funds (57%). Disappointingly, the reliance on savings bank accounts to save for retirement varied only marginally across age cohorts and regions.
(It may be noted that Early Jobbers are people aged between 22 and 27 years, while Money Mooners are aged between 28 and 34 years, and Wealth Warriors are aged between 35 and 45 years)