Is 45 The New 60? CA Decodes The Middle Class Retirement Crisis

The Indian middle class could very well be heading for a retirement crisis much earlier than expected, financial advisors warn as many salaried professionals are struggling to remain employed beyond the age of 45.

What Is This Crisis?

Chartered accountant and wealth advisor Kanan Bahl said that rising lifestyle costs, stagnant incomes and insufficient long-term savings are increasingly pushing people closer to what is known as a financial burnout.

In a LinkedIn post, Bahl writes, "45 is the new 60. Don’t make retirement plans as if you’ll be earning till 60."

This advisory comes in the midst of increasing concerns about rapid changes in technology and hiring patterns which may adversely impact and cut-short many private sector careers.

Bahl added in his post that while jobs will increase with AI and automation, not everyone will be able to adapt.

"Do enjoy your life — but save aggressively and invest wisely as if you’ll only earn till 45," Bahl further warned.

According to him, "lifestyle inflation" among young professionals, particularly Gen Z is a key issue.

He pointed out instances wherein even people earning as much as Rs 25 lakh a year are living paycheck to paycheck and some are even taking loans to attend concerts and post about it on Instagram.

What Should You Do?

According to Bahl, salaried professionals need to make better use of schemes such as the National Pension Scheme (NPS), as well as Employees' Provident Fund (EPF), which offer tax benefits but also enforce financial discipline through long lock-in periods.

As the cost of living increases and AI disrupts traditional career paths, it may be a good idea to reconsider retirement planning.

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