1. Have you made planned investments for your retirement? Yes-65% No-27% Can’t Say-8%
2. Which of the following are your avenues for generating funds after retirement? (Multiple options chosen)
An encouraging trend among Moneylife readers was that two out of three respondents claim to have planned for retirement
Options
Pension product from life insurance company which pays 32.1% annuities Immediate annuity product like LIC Jeevan Akshay 11.0% Provident Fund (Public, Employee, Voluntary) 60.9% Whole life product like LIC Jeevan Tarang, Tata AIG Life 10.0% MahaLife Gold, Bajaj Allianz CashRich Other traditional insurance products (endowment, money 22.9% back) or ULIP Pension mutual funds like Templeton India Pension, UTI 15.7% Retirement Benefit Pension, Tata Retirement Savings Other mutual funds 56.0% NPS (New Pension System) 12.1% Property 41.2% Gold and other precious metals 26.1% Bank FDs and other savings like NSC 38.2% Inheritance 11.1% Depend on children’s support 5.1% Business income 20.2% PPF tops the list (60%). Other popular investments towards nest-egg are: mutual funds (56%), property (41%), bank FDs & other small savings schemes like NSC (38%) and pension products from life insurers (32%). NPS is a laggard (12%) along with inheritance (11%). The last option is to depend on children’s support (5%)
3. Will you invest in a pension product which forces you to buy an annuity and not offer a lump-sum fund? Yes-23% No-54% Can’t Say-23%
Over half of the respondents will not invest in a pension product which forces one to buy annuity and not offer a lump-sum amount
4. What is the major risk for retirement planning? Investment risk-14% Interest rate risk-6% Inflation risk-60% Longevity risk-20%
Six out of ten respondents think inflation risk is the major risk for retirement years
5. What are the main features you look for when investing for building a retirement corpus? (Multiple options chosen) Answer Options
Responses
Response %
Guarantee of capital even if low returns
46.1
High equity exposure as it is for long-term investment Able to get loan on the surrender value of the policy
52.5 10.2
Ability to get good surrender value Investment locked and paid only to nominee on death of policyholder Want flexibility to take lump-sum out and not buy an annuity Tax savings on entry Tax savings on exit
25.9 10.0 46.7 40.2 53.7
There is almost equal preference for guarantee of capital even if returns are low, versus high equity exposure as retirement planning is a longterm investment. Tax saving on entry and exit scores high as a factor in investment decision, as expected. Getting a good surrender value is also vital for respondents