Retiring? You may need 3.5 Crores.

Main Author: Srinivas A, Founder & Chief Scientist - Employee Behaviour & Organization Performance

India is witnessing a wave of retirements of late baby boomers (LBB) in the private sector. Those born from 1960 to 1970. According to our estimate and various industry sources, this group of population would have benefited the most, given their career start during the late industrialisation and globalisation wave in India. What does benefitting mean? This means if they (LBB) were smart and astute, they would have ridden the big career growth wave that India witnessed from 2000 to 2020. Many of those who are retiring or are closer to the gates of retirement would have grown 5x to 7x levels in their career ladder from where they started. For example, if a LBB started as a trainee in the 1980s, now they would have grown 5X with horizontal growths, more geographies, departments, or verticals in terms of Senior mid leadership to CXO levels. Indians will need to save an estimated ₹3.5 crore (approximately USD 401,000) to ensure a comfortable and secure retirement, according to a report titled "Affluent Investors Snapshot 2025" by HSBC.

But why are we talking about this? What we are finding in the private sector in India is a more than normal increase in the extension of work beyond retirement. For example, the Majority retirement age is 58 years, in some sector LBB are being given extensions, contractual engagement or special assignments beyond their retirement age. This is seen mostly at higher levels of Bands. 2. This is making the next generation of leaders develop hot heels, given their due promotion to higher levels is not being considered (Many reasons are attributed, including retirees trying to assert their position as structurally important or lack of leadership pipeline). This results in pre-annuation exits among the next generation of leaders, resulting in higher frustration among the mid-level leaders. There are also interesting cases of seniority getting overlooked by being replaced with younger external hires in high-growth sectors. Contrastingly, younger generations are considering early retirement to prioritise work-life balance. While retirement is often expected to occur between the ages of 55 and 65 in India, this career traffic jam is resulting in CHROs spending sleepless nights to accommodate those who do not want to retire or make those grudging next-in-line seniors happy, by creating positions. Although many mid and low pyramid late Baby boomer in India (who have been putting their sweat, unmindful of looking at their future), quote lack of financial preparedness as a concern, with many realising regrets about not saving or investing earlier. No doubt India ranks 45th among 47 countries in the Retirement Preparedness Index (Max Life 2023 study). Comment your thoughts on this phenomenon.