As India ages, its working population faces a retirement dilemma

Highlights

• With longer life expectancies, expecting individuals to abruptly exit the workforce at a fixed age seems outdated


• The rigidity of retirement age in the formal systems overlooks the invaluable contributions and expertise of seasoned professionals


• In an era where success is often equated with material wealth and professional status, the temptation to prolong one's career and cling to positions of power can be compelling


• Individuals are increasingly recognising the need to take proactive measures to secure their financial well-being in retirement

In today's corporate world, the concept of retirement presents a significant dilemma, particularly in the Indian context. With longer life expectancies, expecting individuals to abruptly exit the workforce at a fixed age seems outdated. This poses a challenge for many senior executives, including prominent business leaders and successful CEOs, who struggle to envision life beyond their corporate roles. This reluctance to step down not only hinders opportunities for the younger generation but also clashes with the evolving nature of work and workplace dynamics. As the world embraces larger tech-enabled businesses and embraces diverse social and cultural engagement, the traditional notion of retirement must adapt.

Retirement, once a steadfast milestone marking the conclusion of one's professional journey, now stands at the conflicting crossroads of tradition and modernity. On the one hand, traditional retirement offers a structured transition, allowing individuals to gracefully exit the workforce, making way for younger talent. It promotes intergenerational equity, facilitating the infusion of fresh perspectives and innovative ideas into corporate environments. Moreover, retirement provides individuals with the opportunity to pursue personal interests, hobbies, and leisure activities, fostering holistic well-being beyond the confines of professional obligations.

However, the rigidity of retirement age in the formal systems overlooks the invaluable contributions and expertise of seasoned professionals, their wealth of experience and institutional knowledge remains indispensable. The reluctance of senior executives to relinquish their corporate roles stems from a desire to remain relevant and engaged.

As the world witnesses the emergence of tech-enabled enterprises and evolving social and cultural norms, the concept of work and workplace undergoes profound transformation. Embracing a flexible approach to retirement, characterised by phased transitions, mentoring programs, and knowledge transfer initiatives, can bridge generational divides and harness the collective wisdom of diverse talent pools. Such strategies enable organisations to adapt to changing realities while nurturing a culture of lifelong learning and professional development.

The ancient scriptures of India offer profound insights into the role of humans throughout their life cycles, providing modern executives with invaluable lessons on the purpose and significance of retirement. Rooted in timeless wisdom, these teachings underscore the holistic development of individuals, emphasising the

importance of balance, fulfilment, and service to society. One key lesson from Indian scriptures is the recognition of different life stages, known as "ashramas," each with its unique responsibilities and goals. Among these, the stage of "Vanaprastha" or retirement holds particular relevance for contemporary executives. In this phase, individuals are encouraged to gradually withdraw from worldly pursuits, shifting their focus towards spiritual growth, self-reflection, and mentoring the younger generation.

Modern executives can draw inspiration from this concept by embracing retirement as an opportunity for introspection and contribution. By transitioning from a purely professional mindset to one centred on wisdom-sharing and legacy-building, they can harness their accumulated knowledge and experience for the benefit of future generations. This aligns with the notion of "Guru Dakshina," where elders impart their wisdom to disciples as a form of gratitude for the guidance received during their own journey.

The desire to work longer and maintain influential positions, driven by a combination of increased life expectancy and materialistic aspirations, reflects a complex interplay of societal, cultural, and individual factors. In an era where success is often equated with material wealth and professional status, the temptation to prolong one's career and cling to positions of power can be compelling.

At the heart of this phenomenon lies the pervasive influence of consumerism and the relentless pursuit of economic growth. In a society that values accumulation and consumption, individuals may feel pressured to continuously strive for more, equating personal worth with professional achievements and financial success. This culture of relentless ambition and competitiveness fuels the desire to work longer hours, climb higher on the corporate ladder, and accumulate greater wealth.

Moreover, the fear of irrelevance and obsolescence in an ever-evolving business landscape amplifies the drive to prolong one's career. As industries undergo rapid technological disruption and paradigm shifts, individuals may perceive retirement as a threat to their relevance and professional identity. This fear of being sidelined or replaced drives them to cling to their pivotal roles, resisting the natural progression towards retirement.

Prolonged exposure to high levels of stress and burnout can have detrimental effects on physical health, mental well-being, and interpersonal relationships. Moreover, the relentless pursuit of material wealth at the expense of personal fulfilment and work-life balance can lead to a sense of emptiness and disillusionment in the long run.

The landscape of retirement and social service systems in India is undergoing significant transformation, driven by the country's burgeoning population and shifting demographics. With approximately 1.4 billion people, India's economy is expanding rapidly, necessitating robust support structures to cater to the needs of its workforce as they transition into retirement. However, the current state of retirement planning in India presents a series of challenges. The primary pension foundation, consisting of state-sponsored schemes, has proven inadequate, particularly for those employed in the informal sector. This segment of the workforce often lacks access to formal employment benefits, leaving them vulnerable to financial insecurity during retirement.

Furthermore, employer-sponsored retirement plans, comprising the second layer, are frequently insufficient to meet the escalating post-retirement needs of individuals. Many employers offer limited or no retirement benefits, leaving employees to fend for themselves in preparing for their future financial security.

As a result, individuals are increasingly recognising the need to take proactive measures to secure their financial well-being in retirement. This realisation has led to a shift in behaviour, with many seeking viable means to supplement or replace traditional pension systems. The emergence of the third pillar, which focuses on building individual, private retirement accounts, represents a promising development. However, this aspect of retirement planning is still in its infancy in India, with limited adoption and awareness among the population. Moreover, the evolving nature of work and employment patterns, including the rise of the gig economy and flexible employment arrangements, further underscores the importance of adaptable and inclusive retirement planning frameworks.

But then as India ages over next many years, it needs to strike a balance between what is retirement, and purpose of life in those “silver” years.

Dr Srinath Sridharan - Policy Researcher & Corporate advisor. / X : @ssmumbai