Indian women are confident about retirement plans, says study

A global survey, Aegon Retirement Readiness Index, provides a measure for evaluating the savings habits and general preparedness of participants for retirement. On a scale of 1 to 10, women scored just 5.5 points, while the average score for men was 6.0.


Indian women participants, however, fell in the higher category with a score of 6.9 on the index. About 35% of the respondents said that they were confident about retirement. In fact, women from other emerging economies, too, reflected the positive sentiment—China, 42%, and Brazil, 29%.


The survey includes responses from 16,000 employees and retirees in 15 countries: Brazil, Canada, China, France, Germany, Hungary, India, Japan, the Netherlands, Poland, Spain, Sweden, Turkey, the UK and the US. Women account for half of all respondents (7,956 in total); of these, 62% are married or co-habiting, and 52% have an undergraduate degree or higher.


Confidence is underpinned in these countries by the prospect of growth fuelling a further rise in real income and personal wealth.


In other markets, confidence has been hit by less favourable developments, such as in Japan, and parts of Europe.


About 23% on Indian respondents also said that they were saving enough for later years; only 7% said they were hardly saving. But that leaves a majority of 70% in the middle. One reason for this positive outlook may be that Indian respondents expect to need only 59% of their current gross annual income at the time of retirement. This is the lowest expectation in the survey—the highest is 86% in Hungary, while it is 77% in Brazil and 72% in China.
One possible reason for a difference between countries is that in some countries, such as Japan, the government or the employers have a big role to play in retirement funding, while in others, such as India, they don’t. Family responsibilities.


While Indian women who were part of this study come across as savers and as being prepared for retirement, the fact remains that, globally, women lack in retirement preparedness, which contrasts sharply with otherwise confident and engaged behaviour in deciding household budgets. The vast majority of women (80%) said they were actively involved in managing their households’ budgets and finances, and 71% said they felt financially confident in this.


Women suffer in terms of wages and employment because of the time they spend outside the workforce raising children. Inevitably, stopping work or working part-time erodes their earning power and their ability to save for the longer term. Even when they save more later on, they miss out on the maximum benefit of investment growth and compound interest. Low earning power also means high dependence on partners.



[Featured Picture Courtesy: The Better India]