Contrary to popular belief that child education and buying a house are the key aspirations of people to invest, a recent study commissioned by Reliance MF reveals that building a retirement corpus was their top priority. The online study was conducted by IMRB across seven states – Maharashtra, Gujarat, Karnataka, Delhi/NCR, Tamil Nadu, Uttar Pradesh and West Bengal.
Retirement was the primary concern of most investors, followed by child education and buying a house. The survey found that 46% of respondents feel that retirement planning is the most important financial goal of their life followed by child education (22%), buying a house (20%) and marriage (12%). Also, close to half of respondents claim that the appropriate age to save for retirement is between 30 and 40 years.
The survey covered 800 respondents in the age group of 30-55 years who are primarily urban and were looking for retirement plans online. These respondents were a mix of retail and affluent investors. The survey provides insights into how investors are dealing with their retirement planning.
Another interesting aspect of the research was the reasons for investing in retirement plans. Majority of respondents want to invest in retirement plans in order to maintain better standard of living and take care of their family needs and responsibilities. 43% are worried about the increasing inflation and 33% want to buy retirement plans as they don’t get pension coverage by their employers.
Meanwhile, those respondents who don’t want to invest in retirement plans cited reasons like dependency on children, sub-optimal returns by pension plans, adequate retirement coverage provided by company and lack of knowledge.
However, majority of respondents still prefer life insurance policies and bank fixed deposits over mutual funds to save for retirement.
Himanshu Vyapak, Deputy Chief Executive Officer, Reliance Mutual Fund feels that investors should take adequate exposure to equity to fund their retirement. “Of Rs. 15 lakh crore of retirement assets, 90% is currently invested in debt securities. The government has been sensitive to expand this portfolio and allow these retirement funds to invest in equities in a calibrated manner. We see this as a positive move that will help generate superior returns in the long term for investors.”
