A new study reveals that urban Indians are significantly underfunded for retirement, with shifting attitudes and planning gaps highlighting the need for smarter savings strategies amid changing expectations.
Urban Indians are still far short of the retirement savings they say they need, according to Axis Max Life Insurance’s sixth Bharosa Talks India Retirement Index Study. The survey found that households in cities had built only 28% of their target retirement corpus on average, while just 11% believed their savings would last a lifetime. Nearly four in 10 feared the money might run out within five years, underscoring a widening gap between retirement ambitions and financial reality.
The findings also suggest that many Indians are rethinking old assumptions about how much is enough. Business Standard reported that confidence in the traditional ₹1 crore benchmark is fading, with only 51% of higher-income households saying that amount would support a comfortable retirement. A separate Mint report said 77% of urban Indians in the study now felt ₹1 crore or less could suffice, even as more people recognise that such a figure may not stretch far enough over a longer retirement.
Financial planners say the right target depends on spending needs, family structure and how long retirement lasts. A common rule of thumb is a corpus worth 30 to 35 times annual expenses at the point of retirement. Deepesh Raghaw, a Securities and Exchange Board of India-registered investment adviser, says those with less than that may need to rein in spending or seek better portfolio returns. Vishal Dhawan, founder and chief executive of Plan Ahead Wealth Advisors, says Indian conditions point to annual withdrawals of roughly 2.5% to 3%, rather than the 4% rule often cited in Western retirement planning.
How the money is invested matters almost as much as how much is saved. Dhawan recommends dividing retirement assets into buckets: one for the next one to three years in highly safe instruments, a second for spending needs four to 10 years away in longer-duration debt and some hybrid assets, and a third for money needed after a decade, where more growth-oriented holdings such as index funds and flexicap or multicap funds can be used. Raghaw says retirees should avoid moving everything into debt simply because they have crossed 60, warning that inflation can steadily erode purchasing power.
The study also points to a wider planning failure. Axis Max Life says 61% of respondents know how much corpus they need to maintain their current lifestyle, while only 29% are confident their retirement savings will last beyond 10 years. It also found that 91% of people aged 46 and above regret not starting earlier. That regret fits a broader pattern: many workers still put retirement near the bottom of their financial priorities, even though half of urban Indians say it should be the first goal after they start earning.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
