Retirement Planning in India
The first thought in the mind of a retiree would mull on managing the expenses of daily livelihood. With the rise in tensions of lack of proper coverage in pensions has been a grievance for many. According to the survey by Melbourne Mercer Global Pension Index, out of 30 countries India is ranked 28 in the pension system.
According to the World Economic Forum, India has only 7.4% of the working population’s pension covered. Needless to say one might have to design pension plans early to ensure proper remunerations once retired.
47% of the Indian Population Failed Reserving For Retirement
According to a survey conducted in 2015 by IPSOS Mori, 44% of the working population in India have put a plug on saving for retirement. Furthermore, the survey revealed that 22% of the population aging 50 to 60 have not even begun saving.
Only 53% of the retirees have received professional advices and help on retirement savings. And 40% of the working population have sought for professional advices on pension plans. To sum up, one out of ten has never received any professional help or advices for retirement allowance.
The few population receiving professional guidance for pension plans seem terrifying. According to surveys at least 10.5 lakh INR is required every year to live off in India once retired.
31 Out Of 1000 Indians Are Hospitalized Every Year
Proper pension plans for future can be advantageous for health-related risks. Patients above the age of 60 is usually on the higher risk of various illness and in-need of constant medical support. Hence, planning for pension is compelling and necessary.
The cost of medical expenses has risen in recent years. Just a decade ago, as per the survey conducted by NSSO (National Sample Survey Office’s) 31 Indians out of 1000 were admitted to hospitals every year.
The admissions in hospitals has been mostly reported to be due to infections, blood related diseases and cancer.
- Infections -24%
- Cancer- 11%
- Blood related Diseases- 11%
The distribution of patients has been different both in rural and urban areas. People mostly sought for public hospitals in the rural area. But there has been a shift from public hospitals to private hospitals in the urban areas. A survey from 2014 reveal that 68% of the Indian population chose private hospitals than public hospitals in urban areas. The cost of getting admitted in private hospitals are higher than public hospitals.
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Pension Allowance Goes Up To 157%
The annuity for the retired central government staffs has increased by 157%. Pensioners are to receive minimum of 9000/- INR up to 1,25,000 INR as alimony for sustenance once retired. The gratuity has also been increased from 10,00000 INR to 20,00000 INR. The government has also confirmed and accepted the proposal to increase 25% of gratuity whenever DA (Dearness allowance) increases up to 50%.
In January 2017, the Delhi government had increased the pension amount for the age of 60-69. The amount has been increased to 2000 INR from 1000 INR for old age pension. The amount for the age of 70 and above has been increased to 2,500 INR from 1,500 INR in 2017.
The ‘disability pensions’ has been raised from 1,500 INR to 2,500 INR. Meanwhile the pension for the Destitute and widows have been increased from 1,500 INR to 2,500 INR.
Increase In Monthly Wages Up To 10%
India has been showing signs of growth in the area of economy. With national labour union demanding increase in their wages up to 15,000 INR per month, the SPC (7th Pay Commission) have settled for 18,000 INR for government employee per month.
Various disparity and conflicts have pushed the government to elevate the salary amount for both unskilled and skilled labour in India. A hike of 10.3% has been assured per employee. It has been projected to increase by 10% in 2018 as well. It will cover a wide range of companies, factories, industries, business sectors etc.
The salary hike projected for 2018 in India is the highest in Asia Pacific. It could support in saving up faster for pension plans once retirement begins. A pipe dream to secure and generate greater pension plans pronto for better future.
- India- 10%
- Indonesia- 8.5%
- China-7%
- Philippines- 6%
- Hong Kong-4%
- Singapore-4%
Possible Reduction of Medical Expenses in India
The improvement in health care sector has been the most debated and required need for change in India. The present government has taken steps to ensure low medical expenses and assistance to all the citizens furthermore supporting pension plans for retirees. A National health policy has been launched in recent years. The government has proposed to raise expenditure on healthcare up to 2.5% from 2% GDP. This could possibly help reduce financial load of pensioners and compensate the expenditure for other requirements.
Besides various steps taken by the government to improve health care in India, there has been rise in the health care sector providing free support and help to the elderly.
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