‘Salary growing but wealth shrinking’, warns CA, says Indians must shift investment mindset to growth instead of savings

A Chartered Accountant has cautioned that India's middle class will see its wealth shrink, despite rising salaries, if investment mindset does not shift towards growth rather than savings. In a detailed post on social media platform X, CA and financial advisor Nitin Kaushik warned: “Your salary is growing, but your wealth is SHRINKING.”

Calling it the “silent crisis of 2026”, where a straight comparison of salaries over a 11-year period shows increase, Kaushik noted that inflation has far outpaced pay. “Your salary may have jumped from ₹90,000 in 2015 to ₹1.5 lakh today … a 66% increase. But when rent, school fees, and insurance have nearly doubled… your real purchasing power has barely moved,” he said.

‘The math of saving is quietly broken’

According to Kaushik, safe investments such as fixed deposits give investors 7% returns, while real inflation for the middle-class has risen 12%. “Every year your money sits idle, it loses ground. You’re not saving. You’re watching your capital slowly dissolve,” he feels.

He added that households' savings rates in India have dropped near 18% of GDP in 2026 — it's lowest since 2017; and not because people are spending recklessly, rather because the cost of living “is now non-negotiable”. He illustrated that in Tier 1 cities, children's schooling, insurance, rent and other essentials now eat up 45% of post-tax income.

Consumption debt: A ‘dangerous shift’

Kaushik further noted that need to meet basic consumption costs is pushing people towards debt products, where “credit cards and personal loans are rising not just for lifestyle, but to bridge the gap between rising EMIs and stagnant real income”.

“We are funding today’s survival with tomorrow’s wealth. The mindset shift is now non-optional. Stop thinking only like a saver. Start thinking like an owner of growth assets. If your money stays parked in low-yield debt instruments, the outcome is mathematically predictable. Slow erosion,” he warned.

He suggests that investors deliberately move towards inflation-beating assets or face a “future that becomes progressively unaffordable”.

Indians planning for a retirement that ‘no longer exists’

Earlier too, Kaushik warned that most Indians are planning for a retirement that no longer exists by ignoring the “Twin Killers” of 2026: healthcare inflation and longevity and are “mathematically likely to run out of money by your 70s”.

He explained that while general inflation in India is near 5%, medical inflation is a whopping 12-14% and as you grow older, there are more chances that you will need to spend some of your savings on healthcare. According to the CA, the new rule should be an absolute minimum of “300x monthly expenses” for 2026.

Kaushik said that to sustain a lifestyle of ₹1 lakh per month in 2026 till your retirement age, you would need to build a corpus of at least ₹3.5 crore — assuming you retire at 60, live till 85, and your investments yield is 2% above inflation.

How to build risk-ready retirement corpus?

• Kaushik suggests that unlike the US, where most retirees follow the 4% annual withdrawal rule, in India's high-inflation environment, a safer a 3% withdrawal rate is a “safe” choice.

• If possible, you can also consider lifestyle arbitrage — moving to Tier II or III towns to save on rent, utilities and other costs; and get more for the same money, while saving more.
• Plan for longevity and consider annuity plans, long-term insurance, savings set aside (in mutual funds, FDs, or other instruments) for use once your cross a certain age.

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