India's Retirement Readiness Improves, but Financial and Emotional Gaps Remain; Luxury Market Booms

The fifth edition of the India Retirement Index Study (IRIS 5.0), conducted by Axis Max Life Insurance in collaboration with Kantar Insights, indicates a positive trend in India's preparedness for life after work. The study, spanning 28 cities and over 2,200 households, shows the overall retirement readiness score has climbed from 44 in 2022 to 48 in 2025.

Health preparedness has seen the most substantial improvement, with its index rising from 41 to 46. This is attributed to increased awareness of fitness, preventive healthcare, a rise in daily physical activity among 79% of urban Indians, and a seven percentage point increase in health insurance ownership over the last three years.

Despite these gains, financial preparedness remains a critical concern. While half of Indians believe retirement planning should start before age 35, only 37% are confident their savings will last over a decade post-retirement. A significant finding is that seven out of ten individuals underestimate their financial needs for a comfortable retirement, often considering ₹1 crore sufficient. This is particularly noteworthy given the current boom in India's luxury market, where spending on high-end goods and services is accelerating.

The emotional preparedness index remains stable at 58, with persistent worries about loneliness and financial dependence on family members. Around 71% of respondents express concern about social isolation in their later years.

Interestingly, women lead in overall retirement readiness, demonstrating greater financial confidence and better health awareness compared to men. Gig workers are also narrowing the financial confidence gap with salaried employees.

Sumit Madan, CEO of Axis Max Life, stressed the importance of transitioning from awareness to effective action and adopting a long-term perspective on retirement savings.

Impact: This study highlights key areas for growth in India's financial services and insurance sectors. The findings underscore a growing need for enhanced financial literacy, realistic retirement corpus planning, and robust solutions for health and emotional well-being in later life. This could spur innovation in retirement products, wealth management services, and long-term savings plans. Companies like Axis Max Life Insurance can leverage these insights to tailor their offerings and marketing strategies, potentially influencing their market position and revenue. The contrast between rising luxury spending and underestimated retirement needs suggests a complex consumer landscape that financial institutions must navigate. The Indian stock market may see a moderate impact, particularly on insurance and financial services stocks, and indirectly on consumer discretionary sectors as spending patterns evolve. Rating: 6/10.

Difficult Terms: Retirement Readiness: The overall state of an individual's preparedness for life after they cease full-time employment, encompassing financial, physical, and emotional aspects. Financial Preparedness: The extent to which an individual has accumulated sufficient savings, investments, and income streams to cover their expenses and maintain their desired lifestyle after retirement. Emotional Preparedness: The mental and emotional capacity of an individual to adapt to the changes, potential isolation, and social adjustments associated with retirement. Health Preparedness: Having a good state of physical health and having plans, such as health insurance and a healthy lifestyle, to manage potential health issues during retirement. Gig Workers: Individuals who are self-employed and engage in temporary, flexible jobs or project-based work, often through digital platforms, rather than holding permanent employment. Corpus: The total sum of money saved or accumulated for a specific future purpose, such as funding retirement or a major purchase.