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Key Points

A new report reveals that younger Indians, particularly those under 25, are increasingly inclined towards early retirement, with many aiming to retire between 45 and 55 years. Over half of the respondents desire a monthly pension exceeding Rs 1 lakh, although few feel confident in their current savings plans. Government-backed pension schemes remain popular among this demographic, while there is also a notable interest in high-risk investments. As the Indian workforce grows, experts from Grant Thornton Bharat emphasize the need for a robust pension system to bridge the gap between expectations and savings.

Key Points: Younger Indians Aim for Early Retirement Over Rs 1 Lakh Pension

  • Younger Indians prefer retiring between ages 45 and 55
  • 55% seek monthly pensions exceeding Rs 1 lakh
  • Government-backed plans remain favored, followed by high-risk options
  • UPS and NPS Vatsalya schemes aim to secure financial futures
2 min read

Younger Indians prefer early retirement, seek over Rs 1 lakh as monthly pension: Report

Younger Indians are eyeing early retirement with 43% looking to retire by 55 and desire monthly pensions over Rs 1 lakh, reveals Grant Thornton Bharat.

"Bridging this gap requires a robust pension ecosystem. - Vivek Iyer/Grant Thornton Bharat"

New Delhi, June 3

Younger Indians, notably those aged 25 years or below, now prefer early retirement and among this group, 43 per cent desire to retire between 45 and 55 years, according to a new report released on Tuesday.

Overall, a significant 56 per cent of respondents plan to retire between the ages of 55 and 65, aligning with standard retirement practices in India.

More than half (55 per cent) of respondents expect a monthly pension exceeding Rs 1 lakh. However, only 11 per cent believe their current investments are sufficient to meet these expectations, said the survey-report by Grant Thornton Bharat.

According to the findings, government-backed plans remain the most preferred option, with 39 per cent of participants favouring such schemes.

High-risk, high-return plans are particularly appealing to younger respondents, with 31 per cent of participants under 25 years expressing interest in these options. This finding suggests a growing appetite for risk among the younger demographic.

The government has replaced the National Pension Scheme (NPS) with the Unified Pension Scheme (UPS). The UPS guarantees government employees 50 per cent of their last drawn salary as a lifelong monthly pension, along with periodic dearness relief hikes and a minimum pension of Rs 10,000.

The government has also launched the NPS Vatsalya scheme, which aims to secure children’s financial future through a pension account. The scheme allows minors to subscribe, with flexible contributions starting at Rs 1,000 annually. It includes an online platform for easy registration and is also available to NRIs.

“As our working population expands, the gap between expected retirement needs and actual savings behaviour is becoming increasingly evident. Bridging this gap requires a robust and inclusive pension ecosystem that aligns with the lifecycle needs of individuals while supporting macroeconomic objectives like capital formation and financial stability,” said Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat.

Many people also feel their gratuity amounts are insufficient, and the low rate of annuity investments further emphasises the uncertainty surrounding guaranteed post-retirement income.

"As India becomes the 4th largest economy its essential for it to have a resolute pension system. The changing demographics which will see an increase in ageing population by 2050 will rely on pension for financial independence,” said Ramkumar S, Partner, Grant Thornton Bharat.

- IANS

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Reader Comments

P
Priya K
Early retirement dreams are good, but expecting ₹1 lakh pension monthly seems unrealistic for most middle-class Indians. We need better financial literacy about long-term savings. The new UPS scheme is a welcome step though! 👍
R
Rahul M
As a 24-year-old, I totally relate! Why work till 60 when you can enjoy life earlier? But the survey is right - most of us don't have proper investment plans. Maybe startups should teach personal finance along with coding 😅
S
Sanjay P
Government schemes are good but returns are low. Youngsters taking risks is understandable - inflation will make ₹1 lakh worthless in 20 years. We need pension plans that beat inflation like PPF used to do in 90s.
A
Ananya T
The NPS Vatsalya scheme for children is brilliant! Starting pension planning from childhood itself - this is the kind of forward thinking we need. More parents should know about this option for securing their kids' future.
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Vikram S
Reality check: With most private jobs not offering pensions, and EPFO returns declining, early retirement is a pipe dream unless you're in top 5% earners. We need stronger worker protections and pension guarantees.
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Neha R
Interesting how priorities have changed! Our parents worked till 60 without complaints. Now we want to retire at 45 AND maintain luxury lifestyles. Maybe we should adjust expectations or work culture needs to change?
K
Karan J
The 50% last salary guarantee in UPS is great for govt employees,

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