According to Survey 2019, it was proposed that the retirement age should be increased by the government from the current 60 years. Even though the survey didn’t mention what the new threshold should be, it mentions the pensionable age reforms being undertaken in China, Germany, Australia, the United States, Japan, and the United Kingdom which are progressively increasing their retirement age; take the example of Japan which moved it retirement age from 66 years to 70 years. These countries, however, have a declining young population.
On the face of it, the survey refers to a higher pension bill for the Centre with a higher proportion of the population aging over the next twenty years. By the end of next decade, China we are overtaken by India as the most populous country of the world.
Meanwhile, the proportion of people above 60 years of age will also rise. With a growing life expectancy because of better health facilities, the survey said that there should be increased in the retirement age as well. It predicts that the proportion of population above 60 years will rise up to 16 percent of the total population of India by 2041.
A financial planner, Chief Executive Officer & founder of Mumbai-based Getting You Rich, Rohit Shah stated that from the personal finance point view of, you would be having a longer time to save for the retirement corpus which means that retirement plan will have to be recalibrated & there will be lower need of savings.
The survey stated that the Centre should make an announcement about the change in the retirement age in advance so that this would help the workforce in preparing for the shift, and give them more time to plan for their pension needs.