Retirement planning is top goal for men, women prefer child's education: Survey3 min read . Updated: 23 Oct 2020, 12:23 PM IST
Emergency fund creation, child's education and retirement are top three goals
Financial and physical health have been among the top two stressors for Indians amid Covid-19 ahead of relationships and family. At a time when economic anxiety is increasing, an overwhelming 90% Indians identify financial health as having a profound impact on their well-being. Having a financial plan in place and investing in wealth creation emerge as ways to help alleviate financial stress and build a greater sense of personal well-being today, shows a survey ‘Wealth & well-being', conducted by Scripbox, a technology-led financial service platform.
Amid Covid-19, Indians have been most stressed because of their physical health (54%), followed by financial health (46%), ahead of family (28%) and relationships (23%). While it’s popularly understood that money can’t buy happiness, an overwhelming 90% of Indians agree that financial health has a profound impact on their well-being. Respondents polled for this survey cite that having a financial plan in place (42%) and investing in wealth creation (23%) would lend significantly to their optimism about the future and their sense of well-being.
However, most Indians do not save enough. The Scripbox Survey shows ,nearly 50% save-- 0 to 20%, and 20% save between 20 to 30% of their income. Indians are also recklessly safe with their savings, with a majority preferring fixed income products such as PPF, LIC and other tax saving schemes, fixed and recurring deposits, or just letting it lie in their savings accounts. One in four respondents invest in mutual funds.
Compared to women, men view investments such as mutual funds and shares and stocks more favorably. Among men, 2 in 3 continued to stay invested in equity markets during the pandemic, whereas less than 1 in 3 women respondents continued to do so.
Interestingly, millennials (those under 35 years of age) are far more likely to let their savings lie idle in their bank accounts than those over 35 years, who would rather invest it than let money lie idle, indicating maturity of understanding of financial planning.
In the backdrop of the pandemic, emergency fund creation tops the goal that 54% respondents want to save/ invest for, followed by children's education (46%) and retirement (43%). While creating an emergency fund is a priority for both men and women, a higher percentage of men, 47%, would like to prioritise investing for retirement, while a majority of women, 55%, for their children’s education. Despite the intent to do so, saving for retirement is not taking priority right now, sidelined by other financial goals. 56% say that they do not actively invest to set up a retirement corpus.
Given the correlation between wealth and well-being, nearly 50% of respondents would like to advise their younger selves to start investing as early as possible in life.
Despite the general environment, there is optimism of the economy recovering within a year, and continuing on the same growth trajectory as in pre-Covid times. Men are more optimistic about the economy getting back on track within a year (54%) compared to women (41%), shows the survey.
“Saving and investing form two ends of one’s financial-planning spectrum. When people embrace investing, they create a greater sense of well-being which stems from the confidence of being in charge of their wealth creation journey. But despite this, a majority of Indians continue to squirrel away their savings in tax saving instruments or letting it lie idle in their bank accounts. Understanding financial goals and picking instruments that help compound wealth over the long-term is key to avoiding regret. This is confirmed by a majority of respondents whose advice to their younger self is to start investing as early as possible", says Prateek Mehta, Co-Founder and Chief Business Officer at Scripbox.