Experts advise saving 15% of monthly income to avoid financial struggles after retirement. 80% of Indians risk depleting their savings post-retirement. Sound investments are recommended for financial security.
The recent COVID pandemic highlighted the importance of savings. Over 80% of Indians face the risk of running out of savings after retirement. Economists fear India's middle class faces a major retirement financial crisis. Wealth analyst Mohit Beriwala, in his LinkedIn post, claims this isn't a future problem, it's already here.
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India's middle class heading towards retirement crisis
He analyzed how much the middle class saves and how long it lasts after income stops. Burdened by EMIs, the middle class faces a high risk of financial crisis. A recent survey shows four out of five (80%) in this class risk running out of funds shortly after retirement.
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Experts say daily financial needs turn into a struggle after 60
Most middle-class Indians have no pension after retirement, and no pre-planned strategy to meet financial needs. Few people adopt adequate retirement savings strategies. For most, daily financial needs become a crisis after 60.
Rising inflation eats into retirement savings fast
Saved money quickly runs out due to rising daily expenses. Remember, India's average inflation rate is 6.7%. If your annual expense is Rs 5 lakh today, it could double in a decade. To avoid this, Mohit Beriwala advises the 15% rule. Save 15% of your monthly income for retirement. He mentions a three-pronged investment approach.
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Beriwala's retirement trio
Equity mutual funds for long-term growth, provident fund for security, and corporate NPS for tax savings and stability are essential.
