The longevity shift: Are we financially prepared to live longer?

Having been part of the financial services industry for years, I have observed a consistent pattern: people plan for the life they expect, not the life they are likely to live. And increasingly, those two are very different things.

One of India’s most significant achievements has been the steady rise in life expectancy. In 1950, life expectancy in India was around 41 years. Today, it stands at over 70, and continues to improve as healthcare, awareness, and quality of life evolve.

This is progress by every measure. But it also raises a fundamental question: are our financial plans keeping pace with how long we are likely to live?

For a long time, retirement in India was a relatively short phase, supported by family, modest savings, or a pension. That model belonged to a different time. Today, retirement can span two to three decades. In many ways, it is like the beginning of a new phase of life.

The challenge is that lifespan and financial preparedness haven’t evolved at the same pace.

The risk we don’t plan for enough

One of the least discussed risks in financial planning is the possibility of outliving one’s savings. Data reflects this gap. India’s pension system continues to face structural limitations, and with a rapidly ageing population, the pressure on individual financial preparedness is only increasing. By 2050, over one in five Indians will be above the age of 60.

A longer retirement horizon changes the nature of planning. It is no longer about building a corpus alone, but about ensuring that it can sustain over time. Add rising healthcare costs and medical inflation to the mix, and the margin for error becomes narrower.

From accumulation to sustainability

A large part of the challenge is behavioural. We are conditioned to focus on accumulation—saving, investing, and growing wealth. What often gets less attention is the next phase: how that wealth translates into a steady and reliable income over time.

A 20-30-year retirement requires a different lens. The question is not just “how much have I built?”, but “how long will it last?”

That shift, from accumulation to sustainability, is where planning often needs to evolve.

The role of structured income

This is where certain financial solutions play an important role. Products that can provide predictable, long-term income help address the uncertainty that comes with a longer lifespan.

Annuities, for instance, offer a level of income certainty that is difficult to replicate through market-linked instruments alone. In the absence of widespread social security, such stability becomes increasingly relevant, particularly in a phase of life where income needs to be dependable rather than variable.

Equally important is the role life insurance plays beyond protection at a single point in time. It supports long-term financial discipline, brings continuity to financial plans, and helps ensure that what is built over decades is not disrupted when life takes an unexpected turn.

Starting earlier makes a difference

If there is one clear takeaway from the longevity shift, it is the importance of starting early. The advantage of time is often underestimated. Decisions made in the 30s and 40s have a disproportionate impact on long-term outcomes, particularly when it comes to building and sustaining retirement income.

India is living longer, and that is something to be optimistic about. More years can mean more opportunities, more experiences, and more time with family. But it also calls for a more deliberate approach to financial planning. A longer life should ideally translate into greater independence and peace of mind.

In this context, life insurance plays a role that goes beyond protection at a single point in time. It supports long-term financial discipline, brings continuity to financial plans, and helps ensure that what is built over decades remains secure, even when life is unpredictable.

A longer life, better planned

India is living longer, and that is something to be optimistic about. More years can mean more opportunities, more experiences, and more time with family. But it also calls for a more deliberate approach to financial planning.

(The author is MD & CEO, Bajaj Life Insurance. Views are personal.)