India’s retirement shock: 75% near age 60 lack a plan as savings fall 3.6x short of goal

India may be heading toward a retirement preparedness challenge, with a large proportion of individuals nearing retirement lacking structured financial plans and significantly underestimating future funding needs. A new survey has found that 75.5% of Indians approaching retirement do not have a detailed retirement plan, highlighting a major planning gap at a time when longevity and healthcare costs are rising.

The concerns become more significant when viewed alongside savings data. According to the latest 1 Finance Magazine survey, the median retirement corpus stands at ₹28 lakh compared with a target of ₹1 crore, creating a 3.6x retirement funding gap. The findings, based on a survey of 1,218 Indians predominantly aged between 40 and 60 years, suggest many are approaching retirement with confidence but insufficient preparation.

The mismatch

The report highlights what it calls a “confidence-planning paradox.” Even among those who lack a detailed retirement strategy, 61.4% believe they will retire comfortably.

Retirement aspirations appear to be driven more by emotional goals than financial calculations. Nearly 48% associated retirement with spending time with family, while 23.3% linked it with rest and relaxation, and 21.7% viewed it as an opportunity for travel. Fewer than three in ten respondents connected retirement primarily with financial outcomes.

Only 24.5% reported having a detailed retirement plan, while 52.5% said their preparation was basic or rough, and 23% admitted having no retirement planning at all.

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Retirement funding

The survey suggests that retirement under-preparedness is not limited to lower-income households.

At the 75th percentile income level, the retirement corpus shortfall stretches to nearly 8x, indicating that even higher earners may be substantially underestimating future financial needs.

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The study also identified significant regional differences. Respondents in metro cities reported a target retirement corpus of ₹2 crore, while non-metro respondents targeted ₹52.5 lakh, creating a 3.8x gap. Researchers noted this disparity is significantly larger than the underlying income difference, suggesting many outside large cities may be underestimating future retirement expenses.

Savings and pressure

Another concern highlighted in the survey is delayed retirement preparation.

The median respondent begins saving for retirement at age 39 and allocates around 15% of annual income toward retirement goals. With many expecting retirement around age 60, individuals effectively have only about two decades to accumulate retirement wealth.

When asked about fallback options in case retirement funds prove insufficient, 21.2% said they would rely on family and friends, 19.1% cited rental income or property, while 24.3% admitted having no backup plan at all.

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Healthcare and longevity risks

Healthcare emerged as the biggest retirement concern among respondents, with 82% identifying rising medical expenses as their top worry.

However, the survey suggests many are underestimating the impact of inflation and longer life expectancy. Medical inflation in India currently runs at 12–14% annually, significantly higher than general inflation.

Researchers estimated that a hospitalisation costing ₹5 lakh today could rise to ₹16–19 lakh by age 75.

Longevity assumptions also appear conservative. About 58.5% expect their retirement savings to run out before age 80, despite improving life expectancy, suggesting many individuals may live well beyond that threshold.

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Familiar investments

Retirement portfolios remain concentrated around traditional products. Fixed deposits and mutual funds each accounted for 61.3% of retirement investments, followed by gold and real estate.

Meanwhile, only 22.7% of respondents reported using the National Pension System (NPS).

The advice gap also remains significant. Nearly 77% said they had not sought professional financial guidance, while family and friends remained far more trusted than financial advisors.

The survey also indicates retirement itself may be evolving. 81.8% expect to retire at age 60 or later, while 64.3% plan to continue working post-retirement, reflecting changing financial realities and shifting expectations around retirement life.

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