Seventy eight per cent of Indian employees feel they will need to save more for retirement.
According to the Global Benefits Attitudes Survey conducted by global professional services company Towers Watson, 71 per cent of retirement plan members report they are under-saving relative to what they ideally should save. With most Indian employees expecting to retire around the age of 60, saving for retirement has appeared as the top financial priority for those above 50 and is among the top three priorities across all age groups.
Amongst members of retirement plans, housing and saving for retirement, are the top two priorities in the below 40 age group, while saving for retirement is the top priority for those above 40.
The survey was conducted across 12 countries, covering 22,347 employees working for large, non-government employers. Emerging economies like India and China witness a much higher savings rate as compared to western counterparts like the US and UK.
Indian employees have the second highest savings rate at 16 per cent, second only to China, yet a large number are not confident of affording a long spell of retirement with an overwhelming 78 per cent feeling the need to save more.
This is especially noticeable among those above 50, where 86 per cnnt opine they will have sufficient financial resources for 15 years into retirement but this figure drops significantly to 63 per cent for a 25-year retirement period.
Save more rather than work for a longer duration
To overcome a possible insufficiency of retirement income, it is interesting to note that across all age groups, Indian employees would rather save more than extend their retirement age. A majority 56 per cent Indian employees would rather save more as compared to 29 per cent who would prefer to work a few years longer.
Sharing perspective, Anuradha Sriram, benefits director, Towers Watson India, says, "In the face of a high inflationary environment and the advent of nuclear families, retirement adequacy is fast emerging as a national challenge with serious economic and social ramifications. While many remain unsettled about their post retirement financial prospects, India has a relatively young workforce, thus allowing them time to plan. That said, there is an evident need for the government and employers to take cognisance of the issue and incentivise or mandate such savings.''
The Global Benefits Attitudes Survey examines employees' attitudes toward their health and retirement benefits. Conducted in 12 countries, the survey was completed by 22,347 employees working in large non-governmental organisations, including 2,006 employees in India, of whom 1,669 are members of a retirement savings plan.