Millennials in India are inadequately prepared for their post-retirement life as retirees are facing challenges in form of rising consumerism, higher medical and education expenses, as also weakening joint family system, says a survey.
According to the Willis Towers Watson Global Benefits Attitudes Survey, employees are facing the issue despite the fact that Indians save more than their counterparts in the western world.
Increasing consumerism, spiralling medical and education expenses, inflationary pressures and a weakening joint family system are some key reasons for this concern, the report said adding that "if not acted upon soon, in the next decade or two, India might be faced with the critical challenge of retirees having inadequate income".
Moreover, research indicates the proportion of workers who are beneficiaries of a formal retirement savings plan (via either the state or an employer) is relatively low. Most workers have to provide the majority of their income in retirement from their own wealth.
Vivek Nath, Managing Director, Willis Towers Watson India added it is high time that employers seize the opportunity to educate and prepare employees for retirement.
"Else, a decade or two down the line, the country could be facing a distressing scenario of retirees having inadequate income over a retirement period potentially longer than their earning lifetime," Nath added.
Recent Willis Towers Watson studies have indicated that the three foremost motivations for saving are buying a house, saving towards children's education and/or wedding and provision for an income in old age.
"Lack of awareness, unrealistic assessment of what to expect on retirement and a short-sighted approach to retiral savings are potential causes of this concern," Willis Towers Watson India Director Kulin Patel said.
Patel added that employers should use retirement planning tools to understand the effect of their retirement plans on the overall savings for employees and must play a key role in educating them.
