India boasts of world's largest youth population, a key driver in attracting start-ups and foreign investors home - promising them the infinite potential of growth. Census data reveals that over half of the population of India is below 25 years of age. Not just the demographics but an exponential rise of India's middle class lately has earned it a claim to be the country of ‘Big Savers and Spenders.’
The other side of the coin
While all this paints a rosy picture for India, there's something more to it that often goes unnoticed. We cannot turn our backs to the apparent reality that the youth of today will age over time.The World Economic Forum (WEF) has already raised an alarm stating that India will have the world’s largest population of retirees by 2050.
Again, lifestyle needs of middle-income groups are improving but are the current savings or investments enough to sustain such affluence is one mind boggling question. The WEF estimates that India is far off from its goal to achieve adequate retirement savings. The gap is widening by 10% yearly. Better health care and improving longevity can further dampen the scenario, reports suggest.
Perplexing realities
What is even more intimidating is India’s ill-preparedness to deal with financial needs of its greying population. Efforts from both the government and individuals remain negligible so far. A report by the United Nations Population Division underscores the shortcoming as it mentions that only 25% of India’s total ageing citizens have some form of pension cover. 2016 Melbourne Mercer Global Pension Index puts India in bottom 3 of 27 countries, accentuating its incompetence to meet financial obligations that are fast approaching as India grows old.
Currently, employer-provided pension programmes and provident fund schemes are all that stands between the millennials and $85 trillion retirement savings shortfall that is expected to arise by 2050. The government appears to be responding to this wake-up call by fixing retirement needs of the unorganised sector, but the middle-class remains largely neglected.
Clearly, it is the need of the hour for this particular income group of the society to take matter into their own hands before it is too late. It’s time to replace outdated savings systems such as bank deposits and gold with newer and higher return seeking alternatives.
There is no better time than now for millennials to exploit the opportunities available to them in the form of equities while they are themselves an influential driver of India’s growth story. Also, it's about time to shed our image of ‘Big Savers and Spenders’ and become ‘Big Investors’ to Retire Rich (Richtire) or else we have to settle for a scanty lifestyle in our grey days.
About The Author: Reenika Avasthi is associated with Inverika Investment Solutions LLP as a Content Writer and Financial Planner. She is a Certified Financial Planner and a freelance content writer in the field of personal finance. Her interest in writing and spreading investor awareness motivated her to start blogging.
Visit www.facebook.com/Inverika to learn more.
No comments:
Post a Comment