`74% Indians financially ready for retirement`

Last Updated: Tuesday, June 14, 2011 - 19:20

New Delhi: Indians, who demonstrate
impressive optimism, have lowest concern about financial
hardship in retirement, according to survey done across 17
countries by Canara HSBC Oriental Bank of Commerce Life
Insurance.

Indians are second best in Asia Pacific with 74 percent
`feeling` adequately financially prepared to handle their
retirement and 69 percent of the respondents see themselves
as being better off in their later life than their parents,
the survey said.

However, 51 percent respondents in India are worried
about being able to cope financially in old age, with one in
ten people in India expecting to continue working in later
life to provide income for themselves, reiterating that the
general optimism towards retirement must not therefore lead to
complacency, it said.

India currently enjoys the fortunate position of
relatively high savings rates. Further, it does not face the
immediate demographic challenges of most of its peers.

However, this will not last, said Canara HSBC Oriental Bank of
Commerce Life Insurance CEO John Holden.

With the looming demographic time bomb, in the long term,
India is likely to face the same pressure as its peers, he
said.

Over the next 30 years, a higher proportion of the
population will be of working age and when they retire, India
too, will face the challenges of an ageing, non-working
population. As life expectancy increases, the number of years
spent in retirement is expected to get greater, he added.

The study further noted that those with a financial plan
for the future enjoy several benefits over those who do not.

It is called `planning premium` and these benefits are
both `hard` and `soft`, including not only greater and more
diverse retirement savings, but also a more positive outlook
and fewer worries about later life, it said.

Individuals who undertake financial planning are not only
likely to be better off in retirement, but also are more
likely than non-planners to associate retirement with positive
ideas such as freedom and less likely to associate it with
negative ones such as financial hardship, it added.

According to the study, a key challenge in encouraging
households to start planning remains the need to raise basic
levels of financial literacy.

The survey had a sample size of 1,028 in India. Of this
778 men while 250 women across various age-group were
surveyed.

PTI



First Published: Tuesday, June 14, 2011 - 19:20

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