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Extending work life may not be easy: Health issues, changing workplace needs may upend plans

- SANJAY KUMAR SINGH & KARTHIK JEROME

Archana Ahuja (name changed on request), a Faridabad-based freelance information technology professional, is 45. Over the past couple of years, she has often found herself worrying about her lack of retirement savings. "With life spans increasing, I should save vigorously for retirement. But growing household expenses and my uneven income have made it difficult to do so," she says.

The fourth edition of the India Retirement Index Study (IRIS), conducted by Max Life Insurance and Kantar, reflects this concern. It found that white-collar gig workers in urban India are less prepared for retirement compared to the broader population, with a retirement preparedness score of 46 versus urban India's overall score of 49. Gig workers' financial index is 48, trailing the national score of 52.

Why do they lag?

Freelancers lack a steady monthly income. "Their volatile income makes long-term, systematic saving and investing for retirement difficult," says Arvind A. Rao, founder, Arvind A. Rao and Associates.

Another factor is the absence of automatic saving mechanisms. "Lack of contribution to the Employees Provident Fund (EPF) is a major factor," says Deepesh Raghaw, a Securities and Exchange Board of India (Sebi)-registered investment advisor (RIA).

Gig workers don't have a fixed retirement age. "This flexibility makes them believe they can work longer to make up for their lack of savings. What they don't appreciate is that health issues could make it difficult to extend their work life beyond a point," says Avinash Luthria, Sebi-registered RIA and founder, Fiduciaries.