Even as Indian employees are expecting to retire around 60 years, 78 per cent believe that they will need to save more for retirement, according to a recent survey.
"About 78 per cent of Indian employees recognise they will need to save more for retirement," according to the Global Benefits Attitudes Survey conducted by global professional services company Towers Watson.
The report revealed that emerging economies like India and China witness a much higher savings rate compared to the western counterparts like the US and the 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.
This is especially noticeable among those above 50, where 86 per cent opine that 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.
The report further revealed that 71 per cent of people, who have retirement plans, think they are under-saving relative to what they ideally should save. Saving for retirement has appeared as the top financial priority for those above 50 and also amongst the top three across all age groups, it found.
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. It also found that Indian employees would rather save more than extend their retirement age.
A majority 56 per cent employees would rather save more compared to 29 per cent, who would prefer to work a few years longer, it said. "In the face of a high inflationary environment and the advent of nuclear families, retirement adequacy is fast emerging as a national challenge with a serious economic and social ramifications," Towers Watson India Benefits Director Anuradha Sriram said. "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," Sriram added.