Looking at The Larger Picture Without Looking at The Steps
Most youth today are concerned about retirement. This concern arises from focusing on the bigger picture rather than the small steps required to get there. In India, the retirement savings are less because of the gap between what individuals require and what they have collected is increasing by 10% annually. It could reach as much as $96 trillion in 2050.1 In the present day, India's pensions account for just 3% of India's GDP2, far lower compared to countries like Japan (31%) or the US (98%)2. This means most Indians can't depend on pension schemes and have to save for their own retirements. This makes retirement planning even more important. But when they look at these figures, it can feel too big to handle. Without dissecting the process into manageable pieces, such as beginning early, contributing regularly, and taking advantage of available retirement products. Many do not know where to begin. They perceive retirement as being too complicated, so they worry but do nothing.
Not Saving at All
One of the biggest causes of youth retirement concern today is the absence of individual retirement savings on a larger level. Only 5.3% of India's working population has any retirement savings scheme(NPS and APY combined), as per the Economic Survey2024-25.3
The consequences are harsh. Without private savings, pensioners depend on their children, continue working, or become financially vulnerable. The gap between anticipated retirement incomes and existing savings is widening, and the lack of young people planning retirement with the help of savings only worsens the situation. In spite of increased awareness of the necessity for retirement planning, many young adults want to delay or avoid saving, either because of competing financial needs or a lack of awareness of the long-term consequences. This state of mind can prove to be expensive, as the compounding power serves best when saving begins early, and waiting even a couple of years can make a big difference in the retirement corpus size.
Not Enough Employer Support
Employer guidance is highly critical for millennials and retirement planning. However, a significant number of young employees in India lack the same. Though there is growth in schemes like the National Pension System (NPS) and Atal Pension Yojana (APY), coverage of pension is still low, as per the Economic Survey 2025.6 Although the number of enrollments into APY has increased to 76 million by the end of March 2025 and more than 165 lakh by March 2025 for NPS.4 Few employers offer continuous encouragement or retirement planning, financial well-being programs to assist workers in preparing for retirement. With the lack of guidance, younger employees tend to ignore the benefits, like employer contributions to retirement funds or participation in group pension schemes. Closing the gap through increased active employer participation and financial education can greatly enhance the retirement readiness of the youth.
Lack of Good Retirement Plans
Most young Indians remain concerned since they lack easy access to good retirement schemes. India's pension scheme is growing but remains less advanced compared to other nations. Most individuals either lack access to pension schemes or lack awareness of their importance. Initiatives such as NPS and APY have helped, but most young employees are not covered under any scheme. According to a survey India's pension system is ranked at 14th in cross-country comparisons.5 This makes it more difficult for youth to begin planning early and remain committed. This makes young people retirement planning even more stressful.
Conclusion
Retirement planning might look like a distant dream, but it is something that should be considered early on by young people. Post-retirement life can extend to 20 years or even more, and without a steady salary, you will require funds to lead a comfortable life. As very few Indian workers have formal pension benefits, saving on your own becomes crucial. Begin early, and select the appropriate insurance plans, such as pension plans. These plans increase your money over time and also safeguard you and your family financially. Keep reviewing your plan annually and adjust if necessary. In this way, you can feel secure and prepared for the future.
FAQs
Why are young Indians severely unprepared for retirement?
Large numbers of young Indians are not putting aside enough to retire. That is because they do not start early and don't realize that they need to save for the future. They mostly depend on family support or believe that schemes of the government will assist. But these programs are not sufficient. Large numbers of them have no idea of pension plans like NPS or APY. Thus, they are left with no proper plan to ensure financial security after retirement.
Why do young adults need to pay attention to early retirement planning?
Young adults must begin planning for retirement early. The earlier they save, the longer their money gets time to compound. Saving early allows you to take advantage of compounding, which causes your savings to increase rapidly over time. By saving now, you can prevent financial issues in the future. Saving early also lessens the burden of saving a large amount of money all at once. It is easier to save a small amount over many years than to attempt to catch up later on in life.
What should you do to improve your preparedness for retirement?
To save for retirement, begin saving early. Even small savings can accumulate over time. Research pension schemes such as NPS or APY, and opt for one that suits you. Be regular with your savings, and attempt to save a little every month. Educate yourself about your choices and take assistance if necessary. You should also not spend too much in the current date, so that you can save more for tomorrow. This will assist in constructing a safer future.
What is the experience of retiring at a young age like?
Retiring early is liberating but has its drawbacks. You might have more time to travel or pursue hobbies, but you must ensure that you have sufficient savings to sustain yourself for several years. In the absence of regular work income, you will need to depend on the savings you made while working. If you did not save enough, you could land in financial trouble. You should plan, save systematically, and enjoy retirement without worrying about money.
References:
- https://cafemutual.com/news/industry/34343-the-retirement-savings-gap-in-india-will-rise-to-96-trillion-by-2050
- https://www.businesstoday.in/personal-finance/retirement-planning/story/indias-pensions-are-just-3-of-gdp-retirement-strategist-says-youre-on-your-own-470017-2025-03-31
- https://economictimes.indiatimes.com/news/economy/policy/pension-sector-needs-to-scale-up-to-enhance-coverage-of-social-security-economic-survey/articleshow/117791376.cms
- https://www.businesstoday.in/personal-finance/retirement-planning/story/nps-and-atal-pension-yojana-see-record-subscriber-growth-in-2024-25-473147-2025-04-22
- https://indianexpress.com/article/trending/top-10-listing/countries-with-the-most-public-pension-wealth-2025-9790687/
- https://www.cnbctv18.com/budget/economic-survey-2025-union-budget-low-pension-coverage-despite-growth-nps-apy-epfo-19549814.htm
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