In today’s fast-paced work culture, the idea of retiring early is becoming more popular among young Indians. Many professionals in their 20s already dream of saying goodbye to the 9-to-5 grind by the time they turn 45 or 50. But the real question is – how many of them are preparing for it financially?

According to a recent report by Grant Thornton Bharat, 43% of Indian professionals aged 25 or younger wish to retire between the ages of 45 and 55. This shows a strong desire for financial independence at an early age. However, the same report highlights a major issue: their current saving and investment habits don’t support this dream at all.

Big Retirement Dreams, But Very Little Investment Discipline

While young professionals may have clear goals of retiring early, their financial behaviour tells a different story. The survey found that most participants are saving just 1% to 15% of their salary for retirement.

This is a big mismatch. Early retirement needs heavy, long-term financial preparation, but the present investment levels are far from what’s needed. Saving only a small portion of income won’t be enough to build a strong retirement fund.

Early retirement means more years to live without a regular income, and that demands proper planning from the start of one’s career. However, most young earners don’t follow this path. They either delay saving or only invest casually.

High Expectations of Monthly Pension, But Low Confidence in Results

Another surprising fact from the report: more than half of the young respondents expect to receive a monthly pension of over Rs. 1 lakh after retirement.

However, only 11% of them feel confident that their current investments can generate that much money. Even more worrying, just 3.65% are sure that their pension-related investments will meet their future retirement needs.

This clearly shows a gap between expectations and financial planning. Most of them are aiming high but are not backing it up with disciplined saving or investing.

Over-Dependence on Traditional Government Schemes

Most of the young earners still rely heavily on traditional government retirement schemes like:

• Employees’ Provident Fund (EPF)
• Gratuity
• National Pension System (NPS)

According to the survey, 83% of young professionals believe these schemes alone will handle their retirement needs.

But in today’s economic environment, these might not be enough, especially if someone plans to retire 10 to 15 years earlier than usual. The funds accumulated through EPF and gratuity are useful but limited. And the NPS works well only when contributions are high and regular over a long period.

Private pension options like annuity plans, which can offer a fixed monthly income post-retirement, are still ignored by most. The survey shows 76% of respondents haven’t even considered investing in such plans yet.

Poor Financial Awareness Holding People Back

A big reason behind the weak retirement planning is the lack of financial awareness. The survey found that more than half of the young respondents have never even heard of the Atal Pension Yojana.

Only 17% of them said they clearly understand how their pension will be calculated. This lack of knowledge is one of the biggest barriers to making smart and informed investment decisions.

Without understanding how money grows, how inflation affects savings, or how various pension schemes work, most people fail to build a strong retirement base.

What Young People Should Do to Retire Early and Stress-Free

If early retirement is the goal, young Indians must take early and serious action. Here are some important steps they should follow to reach that dream:

Start Investing Early to Take Full Advantage of Compounding

The power of compounding works best when you give your money more time to grow. A 25-year-old who invests Rs. 5,000 per month in a SIP (Systematic Investment Plan) can build a much larger fund 50 than someone who starts at 35.

Whether it’s mutual funds, stocks, NPS, or other long-term options, the earlier the investment starts, the better the returns.

Follow the 20% Rule for Retirement Savings

At least 20% of your monthly income should go towards retirement planning. Most people follow the “save whatever is left” method, which doesn’t work well.

Instead, make savings a priority:
Income – Savings = Expenses
This reverse budgeting model forces you to secure your future first and then spend what’s left.

Explore More Than Just Government Schemes

While EPF and NPS are good starting points, they should not be the only plans. Consider diversifying into:

• Mutual funds (especially equity funds for long-term growth)
• Private annuity plans
• Stocks
• Real estate for rental income
• Retirement-specific mutual fund schemes

Each of these offers unique benefits and can help balance the risk in your overall portfolio.

Think in Numbers, Not Just Years

To retire early, you need to figure out how much money you’ll need per month after retirement. Let’s say you want Rs. 1 lakh per month for 25 years post-retirement. That means you need a corpus of at least Rs. 3 crore to Rs. 4 crore, depending on inflation and returns.

Break this number down to yearly goals and savings targets. This will give you a clear picture of how much you need to invest every year.

Get Professional Advice and Review Plans Regularly

Meeting a financial advisor is not only for the rich. Everyone planning early retirement should get help from a trusted advisor to:

• Build a balanced portfolio
• Choose the right mix of risk and return
• Set realistic long-term goals
• Review and adjust the plan regularly

Early retirement is not a fantasy. But turning it into reality needs strict discipline, timely action, and smart choices. Without planning, the dream may turn into financial stress later.

India Needs a Strong Push for Financial Literacy

The findings of the Grant Thornton Bharat report also point toward a national-level need for better financial education.

Financial literacy should become a core part of school and college education. People must learn about budgeting, investing, compounding, and how inflation reduces the value of money.

Only when people understand the value of money and the tools to grow it, will India see financially secure young retirees.

Disclaimer: The information provided in this article is for educational purposes only. Readers should consult financial professionals before making any investment decisions.

Source: Grant Thornton Bharat