Open social media, and you will find hundreds of personal finance gurus telling us where to invest - stocks, SIPs, real estate and everything in between. They will explain how to spend wisely, maximise credit card rewards and build wealth. But hardly anyone talks about retirement. I am not talking about saving for it, but managing your wealth after 60, generating a regular income, paying for healthcare and ensuring you don't outlive your savings.
India's entire financial system - its banks, its capital markets, its insurance industry, its regulatory architecture - was designed around a young, working, and capital-accumulating population. But that hasn't been transitioned towards the needs of the distribution or de-accumulation phase.
By 2036, 15% of India's population will be above the age of 60. Yet most of the financial products they will rely on were designed for a very different India - one with shorter life expectancy, larger families and government pensions.
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The Future Indian Retiree
The next generation of elderly population will look different from today's. They will be wealthier, live longer, and have accumulated more financial assets. But they will also face a new set of challenges that India's financial system is not designed to solve.
First, a much larger share of retirees will come from the private sector and non-pensionable government jobs. Most of them will not have guaranteed pensions and will depend entirely on their own savings to generate income for 25-40 years after retirement.
Second, changing India's demographic structure. Marriage and fertility rates are falling, while DINK (Double Income, No Kids) and SINK (Single Income, No Kids) households are becoming more common. With no direct heirs, their properties could become underutilised assets rather than family legacies.
Third, people are living longer. Earlier scenarios where one lived for 10-15 years after retirement will now easily stretch to 30-40 years - a true second inning of life. That calls for either a higher retirement age or better retirement products, such as inflation-protected pensions and annuities that can provide income for decades.
Fourth, nature and costs of healthcare. Chronic diseases, dementia and mobility-related conditions require years of continuous care rather than one-time hospital treatment. The insurance industry is designed around hospitalisation. We need better healthcare financing products to ensure one doesn't outlive one's savings.
Finally, Indian cities and properties were not built for an ageing society. Therefore, demand for age-friendly infrastructure, assisted living, retirement communities, home healthcare and emergency response services will rise sharply over the coming decades.
These challenges require more than higher savings. They require an entirely new generation of financial products and institutions that help people generate income, finance healthcare, unlock housing wealth and live independently throughout retirement. That's how I see my retirement phase.
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Monthly Incomes Matter
Despite government pensions, today, nearly 78% of India's elderly have no formal pension cover. Most have spent their working lives in the unorganised sector and depend on their families, assets or government welfare schemes after retirement. While schemes such as the Atal Pension Yojana have expanded coverage, awareness remains limited.
The organised workforce relies on two kinds of retirement products. The first pays a lump sum at retirement, such as the Employees' Provident Fund (EPF), Public Provident Fund (PPF) and gratuity. Many people use this money to buy a house, travel, support their children's education or marriage, or invest it for regular income.
The second provides a monthly income through government pensions and annuities under the National Pension System (NPS). Except for most government pensions, these payouts are not linked to inflation, so their purchasing power falls over time. Some retirees instead keep their savings invested and withdraw money every month through a Systematic Withdrawal Plan (SWP). While this can generate higher returns, it also exposes them to market volatility.
India needs inflation-adjusted annuity and pension products while protecting against the risk of outliving one's savings, as seen in Singapore, Australia and the Netherlands.
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Need For Long Long-Term Care Insurance
India's insurance market is still built around treating illness, not financing ageing. While recent regulations have made health insurance more accessible for seniors, there is still no meaningful market for long-term care insurance, which pays for home attendants, assisted living, dementia care or prolonged nursing support. These are often the largest expenses in old age. Such products are common in countries like Japan, Germany and Singapore, where ageing populations have made long-term care an essential part of the social security system.
Indian insurers don't have enough data on Indian senior citizens for creating affordable products. However, technology may help solve this problem. As digital health records, wearables and remote monitoring become more common, insurers may assess risks and design more affordable policies in the future.
Turning Homes into Retirement Income
For many middle-class Indians, their home is their biggest retirement asset. But it is often a dead investment, generating no income. Many even struggle with rising healthcare and living costs despite having a property.
In such cases, there are two ways to unlock this wealth. One is to downsize to a smaller home and invest the surplus. The other is a reverse mortgage, where a bank pays the homeowner a regular income against the value of the house while allowing them to continue living there for life. Neither option has worked well in India. Taxation and transaction costs discourage downsizing, while reverse mortgages didn't work because banks found them commercially unattractive, payouts were small, and the paperwork was cumbersome.
Other countries offer useful lessons. The US backs reverse mortgages with a government guarantee, making them safer for both banks and retirees. Singapore encourages older homeowners to downsize and convert housing wealth into lifelong retirement income. India could also experiment with senior-focused REITs investing in retirement communities and healthcare real estate, or bundle reverse mortgages with healthcare.
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Final Take
These are just a few financial changes I hope exist by the time I turn 60.
The next challenge for India's financial system is helping people decumulate - turning savings into lifelong income, financing healthcare and unlocking housing wealth without compromising dignity or independence - smartly.
There is a second-order impact of building better annuities, long-term care insurance, reverse mortgages and retirement-focused investment products. It will deepen India's bond market, create new opportunities for insurers and financial institutions, and encourage investment in senior housing and healthcare.
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.
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