retirement plan: Why our retirement planning is torn between desire to be taken care of and dream to be independent

For a moment, she struggled to get her bag out of the aircraft’s overhead bin. “May I,” I asked. “Thank you, I am good,” she replied. The typical Westerner’s reply when they are mildly embarrassed that you caught them out seeming a little dependent. “I packed it, didn’t I?”she said with a smile. That incident of many years ago has stayed with me.

The independence of the elderly in the Western world can be a little startling to us from India. The forest ranger who took us on the bear trail in the national park was 80 years old. I love my job and am happy to do it, he remarked. He drove himself to work each day, made his simple lunch sandwiches, and had a twinkle in his eye as he spoke about his departed wife. Not once during the three hour trek did he seek any sympathy or care from us for his age. He was proud of his fitness and attributed it jokingly to the forest air.

In contrast, it is painful if not embarrassing to see absolutely fit Indian adults using the wheelchair assistance to board planes at international terminals. It is a singularly misused privilege. The reasons given include missing the boarding gates, unwillingness to walk or take trains to another terminal, inability to follow signs and reach a specific terminal or gate, not knowing the language to seek help, and so on. The rest of the world seems to have solved these problems that only plague India’s senior citizens that visit their children aboard.

Why are we so different in India when it comes to aging? Our cultural context celebrates dependence. We take pride in being together and in routinely doing tasks and chores for the other. We also volunteer to help very easily in situations when we ascertain a need, which is a great quality. We don’t have to be told to reach out, nor do we wait to be asked. Being served is something we take in our stride or even come to expect. Simplest tasks that can be performed independently are routinely done by others, for a price we willingly pay or as an entitlement.

We love privileges. In our minds, we still are monarchies with kings and hierarchy. We bend and bow easily to power, love favours and seek and give overt respect liberally. Gratitude is a virtue in our society and we expect it for every little favour we have granted. That is perhaps why we are so angry and upset about retirement planning and old age homes. Many elders see it as an admonishment or abandonment by their children. Many children are left feeling guilty and inadequate when they have to choose a senior living facility for their parents. Grown up children are routinely expected to modify their career ambitions to accommodate the demands of their parents. Parents that receive such preferential treatments wear it as a badge of privilege. Things are changing, some would protest. The changes are visible, but we are caught in multiple stages of that transition as a society. The breaking up of the joint family system was the first change. Then we have the stage of cohabitation after aging, where we expect children to take care of the elderly by taking them into their home, when parents have aged or have become single.

Then we have independently living elderly parents, who are attended to by other relatives, or paid attendants, but remain dependent on such help for everything from routine chores to special situations. Then we have those that swear about not depending on their children, but live with physical and monetary limitations that persist as a lament. There is but a small minority that tells itself that being independent till the very end needs planning for both money and health. Our senior population is still at these various stages of dependence. That is why retirement planning is torn between the desire to be taken care of and the dream to be independent.

We still do not have enough fit and happy seniors whose lifestyles inspire others to give up their penchant for privilege and dependence. What we instead have are swanky retirement colonies where money can buy services. We enjoy being looked after for a fee, and consider funding it from our own retirement corpus as an act of independence. Many retirement plans have staying at a fancy retirement home as its goal.

The problem with that approach is that the market for these services will move faster recognising the weaknesses of the consumer. We already see it in many major cities, where bells and whistles are added to sell a facility, only to vanish in a few years. Exploitative practices ensue when the buyers of a service operate from a position of weakness. It is still early days to say how the market for senior living will play out, but I will bet that it will be exploitatively designed and priced. Inflated retirement corpuses will ensue as a result.

The web of choices in retirement gets complicated by rising home ownership. People don’t want to leave the homes they own to live elsewhere. While quarrels for inheritance still happen, it is also very common for parents and their grown up children to buy property for one another. They usually do not want to sell. They seek solutions keeping living in the house as the base case. We now have several specialised services for such seniors, from catering services to errand runners to caregivers that nurse the invalid. Skewed portfolios and costly cash outflows are the results. An Australian friend of mine once remarked that given its population size, India typically throws people at any problem it wants to solve. Our retirement plans need more funding because of the choices we seem to make as we age. We remain too far from the Western model of independence. We also do not lose an opportunity to point out that our culture has so much more to offer than send people off to assisted living like the West.

What is forgotten is that the West makes its choice early on, so that children and elders remain responsible for their lives as adults, independently. No one “sends” anyone else to an assisted facility. The seniors live by themselves, funding their retirement through mandatory tax advantaged savings that are invested in market portfolios. They move to assisted care with great regret when they grow too old or too infirm for independent living.

Our retirement model is too muddled at every stage: goal setting, funding, investment strategy, draw down and bequest because we haven’t answered the fundamental question of how independent we truly desire to be.

(The author is chairperson, Centre for investment education and learning.)

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