India Urges Early Wealth Building as Population Ages

C. Sivasubramaniam Raman, Chairman of the Pension Fund Regulatory and Development Authority (PFRDA), said Indians must build wealth early to prepare for an ageing population.

This shift in financial planning is critical because India faces a significant demographic transition that could strain social and individual resources if retirement savings remain insufficient.

Raman said the urgency of this transition is clear during a discussion on the National Pension System (NPS) and the cost of de-risking lifetime wealth plans. He said that the current trajectory of the population requires a fundamental change in how citizens approach saving and investment.

According to projections, nearly one-in-five Indians will be over the age of 60 by 2047–2050 ^[1]. This means approximately 20% of the population will have reached retirement age within that window ^[1].

To address this, Raman said the NPS is being adapted to better serve a population that is living longer. The goal is to ensure that individuals have sustainable income streams that can withstand the inflation, and health costs, associated with old age.

"We need to 'grow rich before we grow old'," Raman said.

The PFRDA is focusing on expanding the reach of pension products to younger workers. By encouraging early entry into the NPS, the authority aims to leverage compound growth to mitigate the risks of a shrinking workforce supporting a larger elderly population.

This strategy involves balancing aggressive growth in early career stages with a gradual shift toward lower-risk assets as the individual nears retirement. Raman said this de-risking process is essential to protect the principal amount while still ensuring the fund grows enough to support decades of retirement.