Study finds corpus of Rs 65.4 lakh ideal for retirement, says ICICI Prudential Life

ICICI Prudential Life Insurance has conducted a study that suggests Indians view retirement as a time full of possibilities, and not a stop.

The study, which included over 1,100 individuals aged 45 to 75, with respondents including government, private sector employees and others found that individuals view retirement positively as a phase of maintenance, upgradation, and growth.

Survey found that 11% of total income is channeled towards retirement-specific savings. The survey revealed that the respondents consider an average corpus of Rs 65.4 lakh as ideal for retirement. However, the study also showed the emergence of a second front, i.e. a set of individuals who are well prepared to lead a financially independent retired life. They start investing for retirement even before they turn 40 and put aside an average of 17% of their income towards retirement. They invest mainly in NPS and retirement/annuity plans, besides fixed deposits, to become retirement-ready.

For 83% of respondents, the topmost priority was continuing their current lifestyle into retirement while two-thirds of those surveyed were concerned about inflation impacting their retirement savings and, consequently, their lifestyle and 67% of respondents highlighted the need to have an adequate retirement corpus to take care of medical expenses if they were struck with a terminal illness during their retirement.

The survey found that individuals are recognizing the importance of risk-free products that offer guaranteed returns for life, such as annuity plans. The survey also revealed a high interest in investing in annuity plans among 65% of respondents who had not invested in annuity plans previously. In contrast, only 32% of respondents had invested in annuity products, highlighting a gap in retirement planning.

India’s retirement population is growing rapidly and is projected to show a 41% increase by 2031. “With increasing life expectancy, a large segment of people will be looking for solutions to plan for a longer retirement,” said Manish Dubey, Chief Marketing Officer, ICICI Prudential Life Insurance.

"In our research, we found that more individuals are now viewing retirement as an opportunity to explore their interests, follow their passions, and spend time with family and friends. Retirement planning is a long-term process, hence individuals should start saving towards this goal as early as possible. This will enable them to generate adequate regular life-long income.