Retirement corpus for comfortable living? HSBC survey checks out

Kolkata: A comfortable retirement life is something that everyone wants. A recent survey by banking giant HSBC has stated that Indian investors -- who can be described as affluent -- think that one needs a corpus of Rs 3.5 crore to lead a comfortable post-retirement life. The survey was conducted online among 10,797 affluent investors who are between 21 and 69. Each of them has a minimum investable asset of $100,000 or about Rs 85-86 lakh according to existing exchange rates.

Respondents spanned across 12 countries. The most expensive country to retire in was the US, where one needs at least Rs 13 crore (or $1.57 million) for a comfortable post-retirement life. If one retires in Singapore, the amount will be Rs 11.5 crore at a minimum. The amounts for Hong Kong and China came to Rs 9.1 crore and Rs 9 crore respectively. Out of the economies surveyed, retiring in India was the cheapest. The amount (needed for comfortable living) in India was concluded after 1,006 affluent Indians were surveyed. Therefore, India is one of the cheapest countries to retire. (The countries surveyed were Argentina, Australia, Canada, CHina, Egypt, France, Hong Kong, Indonesia, India, Malaysia, Mexico, Singapore, Taiwan, UAE, the UK and the US.

The HSBC survey revealed that the two factors driving their investment strategies for a retirement corpus were broad economic uncertainty and high rates of inflation. Incidentally, healthcare inflation which has been recorded at around 15% is one of the major concerns of the general population and especially of retirees. The survey said as many as 90% of Indian investors cited inflation and economic uncertainty as major drivers.

Though Indians have traditionally reposed a lot of faith in cash holdings and debt papers, most of those surveyed have said that they are depending less and less on cash holdings. While portfolios earlier, on average, held 25% in cash, it has fallen to 15%. The logic: resources should be kept in faster appreciating assets and gold has gained the most in this respect with a rise in 7 percentage points. Affluent Indians have also reported a 4 percentage points shift towards alternative instruments such as private equity and hedge funds.

The asset that generated trust in maximum Indians was mutual funds. As many as 53% of the respondents have invested in mutual fund schemes. The next most-trusted instrument was shares with 50% respondents saying they have put their money into it. Metallic gold constituted a part of the portfolio of 39% of those surveyed. Private market funds was another instrument where 42% reposed their trust.

The rising influence of social media as a purveyor of information was corroborated in this survey too. As many as 66% of the respondents said that they depend on social media platforms for information on financial avenues and 50% watch videos that are available online. As many as 41% take depend on social media influencers for advice. But a higher 66% turn to financial advisers/planners for investment advice.

One of the insights HSBC mentioned was that 46% of the respondents believe that "employer pension schemes may go bust or be unable to pay out to millennials. 37% of working age people would go back to work if their retirement income could not longer provide the standard of living they were used to."