Written by : Knowledge Centre Team
2026-02-17
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7 minutes read
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Retirement means different things to different people. Although governments and private sector organisations define retirement ages, the age of retirement is blurring in this modern world of gigs. Expertise and demand for one’s expertise define the age of retirement.
Therefore, if you have skill sets that are in demand and you wish to work (provided your health permits), you can do so. But despite so much progress and availability of opportunities, it is not practically possible for most people to work beyond a certain age. With advancements in healthcare, the average lifespan has also increased. Additionally, even if you are hale and hearty, you can choose not to work. In that case, you may need a retirement plan.
Only one in four Indians actively prepares for retirement, while many depend on pensions of less than ₹5,000 per month. In fact, the median pension savings often fall below ₹20 lakh. Financial experts caution that due to inflation, even a corpus of ₹1 crore today may hold the real value of just ₹20 lakh by 2045.
With increasing nuclear families, migration to urban and global locations, most senior citizens find themselves stranded alone, left to fend for themselves in their hometowns.
Additionally, a Grant Thornton Bharat pension survey (Aug - Sep 2024) revealed that contributions to retirement products in India remain relatively low, indicating a broad lack of financial readiness for retirement.
As a result, most senior citizens end up enduring retirement rather than enjoying it. This can be avoided if people do not get carried away with some common hearsay about retirement.
Here is a list of the top five common misconceptions around retirement that people fall for and, as a result, end up distressed in their second innings of life.
Key Takeaways
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#1 Too Young to Start Saving for Retirement
It is never too early to start planning for retirement. If you start early, your wealth will grow much faster due to the power of compounding. Moreover, you can start with small investments each year and still build a sizeable corpus by the time you retire. A large corpus helps you live off the returns rather than eat into the core principle.
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#2 Too Late to Save For Retirement
Better late than never!
Even if you realised the need to save at the age of 45, a systematic plan could help you build a good retirement kitty. Look for the best pension plan in India that initially allocates a large portion of your money into equity. In the years closer to retirement, the fund will move most of your money to safer debt instruments.
Life insurance plans give a dual benefit of providing life cover as well as a predictable stream of income post-retirement. The best retirement pension plans in India are some of the safest long-term plans and give you the following two options:
Immediate Annuity: Where your pension starts immediately after you invest your money
Deferred Annuity: You can invest now and start your regular income a few years later
The Pension4Life Plan by Canara HSBC Life Insurance offers both annuity options. In an Immediate Annuity, you must invest a large sum of money immediately. In the Deferred Annuity option, you can invest over a few years to build a corpus, which will turn into regular income after the vesting period.
#3 Don’t Have Enough to Invest
If you have just started working, you may feel that your salary is just about sufficient to meet your expenses. It is tempting to procrastinate on financial planning for retirement savings, but this can be risky. Even small savings started early grow into a large fund over the years. You can keep increasing the proportion saved as you progress through your career.
You can explore guaranteed return plans that look at protecting life, generating an income stream, giving away loyalty additions, and financially supporting the family till the end of the policy period.
#4 Your Inheritance is Enough to Cover the Expenses
Inheritance may or may not suffice depending on the type and size of the asset. Liquid assets are generally easier to utilise when needed. If you inherit real estate such as land, you may have to either sell it off or reverse mortgage it to avail a cash flow. Both cases depend on the location and demand for such a place. A house may generate some rent provided it is in a place where there is a demand for rented houses. While selling off property, any existing loans will also have to be cleared. The market value of all such assets must be ascertained first.
#5 Post Retirement, your Expenses will Decrease Significantly
The cost of living increases year on year. If your money does not grow faster than the rate of inflation, you will not be able to maintain even the same lifestyle in the future, even with the current level of expenses. Healthcare becomes an important factor in old age, and the costs associated must be factored in. People also require more helping hands in old age, which will cost money.
Why Retirement Planning is Not Just about Money?
Retirement is often viewed through the lens of financial preparedness, but emotional, social, and lifestyle aspects are equally important. After decades of work, the sudden shift to a slower pace can be disorienting, especially if one’s identity has been closely tied to one's profession.
Purpose and Routine: Many retirees struggle with a loss of structure. It’s important to create a new daily routine that includes activities that are meaningful and mentally stimulating.
Social Circles: With work gone, regular social interactions shrink. Making the effort to stay connected with family, friends, and community can positively impact mental health.
Health & Mobility: Planning for retirement must also include how you intend to stay physically active and mentally agile. Regular exercise, preventive health check-ups, and engaging hobbies can make a major difference in quality of life.
Retirement planning is about designing a fulfilling second innings, one where you are financially secure, socially connected, and emotionally content.
Common Mistakes to Avoid While Planning for Retirement
Even the most well-meaning individuals can make missteps that compromise their retirement dreams. Here are a few common pitfalls to watch out for:
Underestimating Future Expenses: Many assume they’ll spend less after retirement, but healthcare, home maintenance, and lifestyle costs often remain the same or increase.
Not Accounting for Inflation: A corpus that looks big today may not hold the same value 15–20 years later. Always project expenses with inflation in mind.
Ignoring Long-Term Care Needs: Most people don’t plan for medical emergencies or long-term care support, which can drain savings quickly.
Lack of Diversification: Relying on a single investment or asset class (like real estate or PPF) can expose you to risk. A balanced portfolio with a mix of equity, debt, and insurance-backed instruments offers better protection.
Delaying Retirement Planning: The later you start, the harder it is to build a sufficient corpus. Starting early, even with smaller amounts, gives your money time to grow.
Being aware of these mistakes and correcting course early on can save you from a lot of stress and financial strain in your golden years.
Conclusion
Retirement is no longer a fixed milestone. It has become a flexible phase that needs active preparation. Dispelling myths and starting early (or wisely, if late) is the key to enjoying, not just enduring, your second innings. Financial security, emotional readiness, and a strong support system are the pillars of a happy retirement. Begin planning today to live on your terms tomorrow.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
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