‘Awareness, Affordability, Discipline: 3 Keys To A Planned Retirement’

Retirement planning solutions must reach the middle- and lower-income groups, for whom the crisis is most acute

- 

By 2036, just a decade away, nearly 15 per cent of Indians will be over the age of 60, up sharply from 10.50 per cent in 2011. This should make us pause, because it means nearly 240 million Indians will soon face a retirement challenge.

Retirement is not easy because senior citizens go through a phase of physical and social adjustment. But when financial insecurity gets added to this, it becomes a double burden.

At its core, the problem is simple: awareness, affordability, and discipline. To understand the scale of this challenge, we need to look at India’s workforce and the vastly different realities they face.

The Reality We Don’t See

India has roughly 560 million working people. Of these, about 450 million are in the informal sector, while the rest 110 million work in the formal sector. This distinction is critical because each segment faces different retirement planning challenges.

Affordability is a significant constraint, particularly for the informal segment. Auto drivers, vegetable vendors, and daily wage workers typically earn between ₹15,000 and ₹25,000 per month, which is just about enough to pull through the month, leaving virtually no surplus for retirement planning.

Solutions Exist, But Awareness Does Not

Awareness is an even bigger barrier. The government matches every rupee contributed by citizens in schemes, such as Pradhan Mantri Shram Yogi Maandhan (PM-SYM), and the Atal Pension Yojana (APY), essentially offering free money for retirement. Yet, millions of Indians remain unaware that these schemes even exist.

The government has created three primary pension schemes designed for different income segments of the informal workforce.