A comprehensive survey by 1 Finance Magazine among 1,218 Indians aged 40-60 has exposed a significant disconnect between retirement confidence and actual planning. According to the survey findings, 75.5% of respondents do not have a detailed retirement plan, yet more than 61% of those without proper planning still expect to retire comfortably. This gap between emotional expectations and financial preparation is becoming a serious concern as many households may underestimate their actual retirement needs.
The survey reveals that many Indians begin retirement planning relatively late in life. The median age at which people start actively saving for retirement is 39, leaving only around two decades to build a sufficient corpus before the typical retirement age of 60. The median respondent currently holds a retirement corpus of ₹28 lakh, while the median target corpus stands at ₹1 crore, translating to a substantial 3.6-fold shortfall. At the 75th percentile, respondents reported having ₹50 lakh saved against a target corpus of ₹4 crore, implying an eight-times gap.
The survey data shows a significant disparity between urban and rural retirement planning. Metro residents reported a target retirement corpus of around ₹2 crore, while non-metro respondents targeted about ₹52.5 lakh. This 3.8-times gap 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. Nearly 58.5% of respondents expect their retirement savings to run out before age 80, while urban Indians aged 60 are expected to live another 22-24 years on average.
Healthcare emerged as the single biggest retirement concern for respondents, with 82% identifying it as a major worry. However, the survey found that most people are not planning adequately for medical inflation or longer life expectancy. The report highlighted that a hospitalisation costing ₹5 lakh today could cost between ₹16 lakh and ₹19 lakh by the time a person reaches 75. Healthcare inflation in India is estimated at 12-14% annually, much higher than general inflation, creating significant longevity risks. Nearly 60% of respondents expect their expenses to decline after retirement, a belief that may not hold true once healthcare costs are factored in.
Indian households continue to rely heavily on traditional savings instruments, with fixed deposits and mutual funds equally popular at 61.3% each, followed by gold and real estate at 47.3% each. However, only 22.7% reported investing through the National Pension System, despite its long-term retirement focus and tax benefits. Nearly 77% of respondents said they do not consult financial professionals for retirement planning, instead relying on family and friends for guidance. Even among higher-income respondents earning above ₹25 lakh annually, many still preferred managing retirement planning independently, highlighting the lack of trust in professional financial planning services.
