Two studies released this week show how retiring in India remains a sobering prospect.
India ranked last on the Natixis Global Asset Management's annual retirement index, which ranks 43 countries including BRIC nations (Brazil, Russia, India, China) on retirement security based on factors such as quality-of-life, health and finances.
Norway topped the overall rankings, followed by Switzerland and Iceland. The index takes into account five-year averages of real interest rates and inflation. The list is comprised mostly of IMF's advanced economies, OECD and BRIC nations.
Among BRIC countries -- that generally struggle with quality health care systems -- India scored the lowest in the health care sub-category, attributable to the country's low health care expenditure per capita, non-insured health expenses, and lack of basic health care in rural areas. India also ranked at the bottom for quality-of-life category, because of factors like air quality, happiness, and environmental pollution.
To be sure, India scored well in the Natixis' old-age dependency and unemployment sub-categories, but high inflation and high public debt of the country were cited as problems. India also improved its scores for non-insured health expenses, governance and interest rates indicators.
Another report by HSBC showed that nearly half (47 per cent) of working people in India have either not started saving for retirement or face difficulties in saving for the future. About 44 per cent of those people who had started saving aren't saving anymore, the study said.
Only about 25 per cent of Indians said they were reliant on government retirement funding compared to the global average of 45 per cent; Nearly 15 per cent of Indian respondents said they were likely to financially depend on their children during retirement, compared to 9 per cent of global average.
But expenses during retirement remain high - about 68 per cent of the Indian retirees surveyed said they were borrowing or financial supporting others, compared to 50 per cent of the global average. All that means people aren't saving enough for retirement.
Globally, the current generation of retirees started saving for their retirement at the age of 35, and retired at 58, saving for an average period of 23 years, said HSBC.
That trend is changing globally as working-age people now begin to save five years earlier around the age of 30 and expect to work until 60, an average of 30 years of retirement savings.
The HSBC report was based on the survey of over 18,000 people across 17 countries.
According to 2011 census, about 8.6 per cent of India's population was over the age of 60. The elderly population is expected to increase by 20 per cent by 2021, according to a report by Helpage India.