Despite increasing incomes and awareness about financial planning, most Indians still rely heavily on traditional government-backed schemes like EPF, NPS, and Gratuity for their retirement. A recent survey by Grant Thornton India paints a worrying picture — many individuals have high hopes for their retirement income, but very few are investing enough to reach that goal.

Most Working Indians Depend Only on Traditional Retirement Schemes

Grant Thornton’s survey revealed that about 83% of Indians depend on EPF (Employees’ Provident Fund), Gratuity, and NPS (National Pension System) as their main retirement savings tools. While these schemes offer safe and reliable returns, depending only on them shows a lack of investment diversification. This also highlights that many people are not thinking about inflation, rising expenses, or emergency needs during their retirement years.

Experts say that putting all your money into just one or two schemes can limit your potential returns and may not be enough to cover your post-retirement lifestyle.

High Hopes, But Low Preparedness for Pension Income

One of the most surprising findings in the survey was the gap between retirement income expectations and actual preparedness. More than 55% of people believe they will receive a pension of over Rs. 1 lakh per month after retirement. However, only 11% of them believe their current savings and investments are enough to make that happen.

This wide gap suggests that people are overestimating the returns they will get and underestimating how much they need to save now to live comfortably later. It also shows a need for better financial literacy and retirement planning among the public.

Retirement Planning Trends Among Indian Youth

The younger population of India, especially those under the age of 25, are showing a different mindset. They are more open to investing in high-risk, high-return options like mutual funds, equity, and market-linked instruments. About 31% of the youth prefer such investments, showing that they are ready to take risks for better returns.

At the same time, there is a visible trend of early retirement planning among the youth. 43% of respondents aged 25 and below want to retire by 45–55 years, which is much earlier than the usual retirement age of 60. This shows that younger Indians are thinking more about work-life balance and personal freedom rather than just long-term job stability.

Age-Wise Retirement Planning Still Follows Traditional Patterns

Even though the youth are showing new preferences, most Indians still plan to retire between 55 and 65 years, which aligns with the country’s usual employment practices. About 56% of respondents in the survey said they are targeting this range as their retirement window.

Experts believe that while this age group is common, people still need to consider lifespan increases, rising medical costs, and inflation, which may demand stronger and broader financial planning strategies.

Pension Contributions Are Still Too Low

A major issue is the low monthly contribution towards retirement savings. Around 74% of people contribute only between 1% and 15% of their monthly salary to retirement schemes. This contribution rate is not enough, especially for people who want to receive Rs. 1 lakh or more as a monthly pension post-retirement.

This shows a conservative approach due to current financial pressures or a lack of knowledge about long-term needs. Many Indians face challenges like household expenses, EMIs, and child education costs, which impact their ability to save more for retirement.

Many Indians Don’t Know How Pension Is Calculated

Another concerning insight from the report is the lack of awareness about how pensions are calculated. About 52% of people said they only had some knowledge, while 30% admitted they had no idea about how their retirement income would be decided.

This highlights the urgent need for awareness programs and better financial education. Without knowing how pension schemes work, many people may find themselves financially unprepared when they finally stop working.

Need for Financial Planning and Professional Advice

The report clearly shows that Indians need to start thinking long-term, planning better, and diversifying their retirement investments. While government-backed schemes are a good starting point, they should not be the only option.

Financial advisors suggest a mix of EPF, NPS, mutual funds, public provident funds (PPF), and pension plans to create a balanced retirement portfolio. Early and disciplined savings, even in small amounts, can go a long way in building a secure future.

Retirement Planning Can No Longer Wait

With rising healthcare costs, longer life spans, and growing lifestyle expectations, relying only on traditional schemes like EPF and Gratuity may not be enough. Young earners must begin planning early, invest wisely, and understand the maths behind pensions.

Retirement should be a phase of life to enjoy peace and financial independence, not one where people struggle due to poor planning. Whether you’re 25 or 55, it’s never too early or too late to take retirement seriously.

Source: Grant Thornton India, Navbharat Times
Disclaimer: This article is based on a recent survey report. Please consult a financial advisor before making any investment or retirement decisions.