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Why Are Today’s Youths Concerned About Their Retirement Life?

Millennials and retirement planning are now being talked about more than ever. Many young people are thinking about their future early. Planning for retirement is not only for older people. It can start at any age. For millennials, starting early can help build a strong base for later years.

 

With changing jobs and lifestyles, many millennials prefer flexible options. They are looking for simple and safe ways to save money for retirement. Some also choose plans that give life cover along with savings.

 

Retirement planning may sound difficult. But it is actually about choosing a plan that suits your needs. The earlier you start, the better it may be in the long run. Let us understand this better.

Here, we will explain how life insurance for retirement planning works. You’ll learn why it is helpful, what types of plans are available in India, and how to choose the right one. Planning early can make your future safe and peaceful. Read Less

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Written ByShruti gujarathi
AboutShruti gujarathi
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Shruti gujarathi has 5 years of experience in the BFSI sector, and as Manager- Digital Marketing at Bajaj Allianz Life Insurance, manages digital and content marketing. She has had hands-on experience in content strategy, performance marketing and Strategic Alliances over a career spanning 10 years.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 21th May 2025
Modified on: 23th May 2025
Reading Time: 15 Mins
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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:


  1. https://cafemutual.com/news/industry/34343-the-retirement-savings-gap-in-india-will-rise-to-96-trillion-by-2050
  2. 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
  3. https://economictimes.indiatimes.com/news/economy/policy/pension-sector-needs-to-scale-up-to-enhance-coverage-of-social-security-economic-survey/articleshow/117791376.cms
  4. 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
  5. https://indianexpress.com/article/trending/top-10-listing/countries-with-the-most-public-pension-wealth-2025-9790687/
  6. https://www.cnbctv18.com/budget/economic-survey-2025-union-budget-low-pension-coverage-despite-growth-nps-apy-epfo-19549814.htm

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~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

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Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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The Unit Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.

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Bajaj Allianz Life Goal Assure II - A Unit-linked Non-Participating Individual Life Savings Insurance Plan (UIN: 116L180V02)

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Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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