Strategizing for retirement constitutes a crucial aspect of one’s financial journey. Commencing the contemplation of how you’ll sustain yourself during your retirement is a task that can be undertaken at any age — whether it’s early or later in life. Initiating the planning process sooner enhances the array of choices available to you and facilitates the achievement of your retirement goals.
The financial requirements for your retirement hinge on factors such as your chosen lifestyle, anticipated lifespan, and the local cost of living. A general guideline is to target saving approximately 10-15 per cent of your annual income. However, due to escalating expenses, many households may deprioritize retirement savings. This trend is underscored by a recent BankBazaar survey, revealing a significant decline in retirement planning. The percentage of savings allocated to retirement has contracted from 45 per cent in 2022 to 38 per cent in 2023.
Retirement savings strategy is impacted
Numerous women encounter difficulties in saving for retirement, influenced by various factors. There are several reasons why women may redirect retirement savings toward other financial goals. The majority of women have shifted their focus from retirement to other savings objectives, with only 34.3 per cent currently saving and investing for retirement, down from 48.45 per cent last year. In contrast, the percentage remains relatively steady for men, with 40.1 per cent continuing to prioritize retirement planning compared to 41.86 per cent the previous year.
The data for this year reveals a changing pattern in women’s engagement with retirement planning. In 2023, only 57 per cent of women are actively building a retirement fund, marking an 11 per cent decrease from 68 per cent in 2022. Conversely, for men, the figure experienced a slight increase from 54 per cent to 55 per cent.
There is a concerning increase in the proportion of women lacking a retirement fund, climbing from 32 per cent in 2022 to 43 per cent in 2023. On the other hand, for men, there has been a slight decrease in this statistic, dropping from 46 per cent in 2022 to 45 per cent in 2023.
Early jobbers prioritize saving for retirement
The data suggest that individuals typically commence significant retirement savings in their late 20s to early 30s. In 2023, nearly nine per cent of respondents reported actively building a corpus in the range of ₹50- ₹75 lakhs, closely followed by another eight per cent working towards a retirement fund in the ₹75 lakh- ₹1 crore range.
In the respective corpus brackets, these numbers show a notable decrease compared to the previous year, with 18 per cent actively saving for a fund in the ₹50- ₹75 lakh range and 17 per cent working towards a corpus in the ₹75 lakh– ₹1 crore range.
MoneyMooner women take charge of retirement savings
In the current year, MoneyMooner women (22 per cent) constitute the largest group among those actively building a retirement fund in the ₹50–75 lakhs range. Additionally, in two out of three categories, a greater percentage of women (Early Jobbers – 7 per cent, MoneyMooner – 13 per cent) are focused on accumulating a fund in the ₹1.5–2 crore range compared to men in corresponding groups (Early Jobber – 6 per cent & MoneyMooner – 9 per cent).
| Retirement Savings Goal | |||||
| Early Jobbers | Money Mooners | Wealth Warriors | Women | Men | |
| Less than ₹25 lakh | 9% | 4% | 5% | 7% | 5% |
| ₹25 – 50 lakh | 19% | 15% | 18% | 15% | 17% |
| ₹50 – 75 lakh | 18% | 19% | 18% | 21% | 17% |
| ₹75 lakh – 1 crore | 14% | 20% | 15% | 18% | 17% |
| ₹1 – 1.5 crore | 10% | 15% | 9% | 12% | 12% |
| ₹1.5 – 2 crore | 6% | 11% | 13% | 12% | 9% |
| ₹2 – 5 crore | 12% | 8% | 11% | 6% | 12% |
| Above ₹5 crore | 12% | 8% | 10% | 9% | 10% |
Discussing the favoured investment options for retirement planning, the preferences of the three age groups were consistent. A significant 67 per cent of individuals selected savings bank accounts as a primary financial instrument for retirement planning, closely followed by fixed deposits and mutual funds (57 per cent). Unfortunately, the dependence on savings bank accounts for retirement savings showed only slight variations across age groups and regions.
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Published: 30 Dec 2023, 11:10 AM IST