'India’s pensions are just 3% of GDP': Retirement strategist says you’re on your own

A retirement crisis is silently brewing in India. With pension assets accounting for only 3% of GDP, the country lags far behind developed nations like Japan (31%) and the US (98%). For most Indians, that means one thing: the state won’t take care of you in old age—you’ll have to do it yourself.

“Most Indians cannot rely on structured pension systems and will need to fund their own retirement,” writes Mumbai-based retirement strategist Milind Deogaonkar on LinkedIn. “Which is why personal retirement planning is more critical than ever.”

According to a report by DSP Pension Fund, India’s retirement savings gap—the difference between what retirees need and what they have—is growing at 10% annually and could hit $96 trillion by 2050. In contrast to countries with robust pension coverage, Indian retirees face an uphill battle, often forced to depend on personal savings, family, or continued work.

The gaps are structural. “India’s pension market remains underdeveloped because most people either don’t have access to formal pension schemes or are unaware of their importance,” Deogaonkar notes. The Economic Survey echoes this, pointing out that only 12% of India’s workforce is covered under any formal retirement savings plan.

He also highlights how cultural expectations have clashed with changing realities. “Traditionally, Indian retirees have depended on their children for financial and emotional support,” he writes. “But changing family structures are disrupting this pattern.” With nuclear families and urban migration now the norm, many elderly parents find themselves without the support systems they once took for granted.

Compounding the issue is a lack of awareness. Deogaonkar says many underestimate how much they’ll need post-retirement. Medical costs, rising inflation, and longer lifespans can drain even sizable savings. “Yet most Indians don’t plan for these expenses until it’s too late,” he cautions.

The message is clear: whether you’re in your 30s, 40s, or 50s, the time to plan is now. “A person retiring at 60 today might need to fund 25–30 years of living expenses,” Deogaonkar warns. Without a structured pension plan or investment strategy, “the money may run out long before you do.”