Why many Rs 40 lakh/annum earners will retire poor

Why many high-flying Indians are dreaming of a great retirement, but the actual numbers suggest otherwise. Indians have sky-high expectations for their retirement income, but their savings habits don’t match. According to Grant Thornton’s Indian Pension Landscape report, more than half of their respondents expect a monthly pension of Rs 1 lakh or more. However, when we look at actual savings patterns, the truth looks a lot less comfortable. That’s a full-blown chasm between ambition and action. Why the gap? While many Indians expect a comfortable retirement, most are saving far too little to make that dream a reality. Because only 74 per cent of respondents contribute between just 1 and 15 per cent of their salary towards retirement savings, a range that’s far below what’s required for a robust pension. Even among high earners (those earning above Rs 40 lakh annually, which is 30 per cent of the survey base), 58 per cent contribute only between 1 per cent and 15 per cent of their monthly income. In fact, the scourge of low savings rate plagues across all income levels, as very few go beyond the 20 per cent savings rate, which is what’s actually required to sustain a large post-retirement corpus. Why low savings rates fall short The idea that a 5-10 per cent savings rate is enough is deeply flawed, and the numbers prove it. We did some data crunching and here’s what we found: Saving just 5 per cent of your income for 30 y

This article was originally published on July 08, 2025.