'You are on your own': Wealth expert warns of retirement crisis unfolding in India

India is quietly heading toward a financial cliff—and most people won’t see it coming until it’s too late.

“We’re all on our own,” warns wealth advisor Rajeshkumar G in a widely shared LinkedIn post. His message is blunt: India’s retirement system is broken, and unless both individuals and policymakers act swiftly, millions will enter old age unprepared, unsupported, and impoverished.

Pension fund assets stand at just 3% of the nation’s GDP, compared to 130% in Australia, 100% in the UK, and 150% in the U.S. Nearly 88% of Indian workers—primarily in the informal sector—have no formal retirement coverage. The few who do are mostly in the shrinking organized sector.

Traditional support systems have eroded. Joint families, once the backbone of elder care, are breaking down under urban pressures. Government-backed options like the National Pension System (NPS) have seen tepid uptake, despite tax incentives.

By 2050, one in five Indians will be over 60. Medical costs already devour 62% of the average retirement corpus, with healthcare inflation surging at 14% annually. And most Indians save just 10–12% of their income for retirement—far short of the recommended 20–30%.

Worse still, only 27% of Indians are financially literate. Over 10 pension schemes, regulated by different authorities, create a tangled, confusing system that leaves most savers lost.

So how much is enough to retire in India?

According to financial planners, a corpus of Rs 5 crore can be sufficient—if managed wisely. With a 6% annual return before taxes, this amount could yield Rs 2–2.5 lakh per month, supporting a comfortable lifestyle in most cities. But this assumes prudent investments, disciplined withdrawals, and robust health insurance.

Your lifestyle, retirement age, and city of residence matter. Early retirement or frequent luxury spending might push the requirement to Rs 7–10 crore. Those planning a modest or upper-middle-class lifestyle may find Rs 3.5–5 crore adequate, especially with a diversified portfolio and a “bucket strategy” to manage sequence-of-returns risk.

Rajeshkumar’s warning is stark: “There is no bailout coming. The only safety net is the one you build yourself.”