Tej Singh Kardam

InIndia, senior citizens often find themselves in a paradoxical situation. Indians born in the pre-liberalisation era grew up in a time of scarcity and limited economic opportunities. In this situation their upbringing instilled a deep-seated habit of saving and an aversion to spending. For them, wealth accumulation was not just about financial security but also a means of pacifying their fears about their unknown future needs.

Despite possessing significant assets and savings, many lead frugal lives, unwilling to enjoy the wealth they have painstakingly accumulated. This has resulted in them ‘dying rich but not living rich’. This is particularly prevalent among older generations, who, despite being financially sound, feel insecure and choose to live with a cautious, conservative approach. While the younger generation is moving away from traditional investments like real estate and gold, the elderly remain emotionally attached to these assets.

Possible reasons as to why senior citizens tend to die rich rather than living rich:

Living modestly despite wealth:

Many senior citizens in India continue to live modestly despite being financially sound. They often prioritise frugality and self-denial, driven by concerns about potential medical expenses, longevity, and the need to support their children or grandchildren. This conservative approach can lead to an unnecessarily restricted lifestyle, where seniors deny themselves the comforts and experiences they could easily afford. The fear of outliving their savings, or the possibility of an unexpected medical emergency wiping out their wealth, often looms large in their minds.

Emotional factors:

Senior citizens have retained their emotional attachment to traditional investments. They often see real estate and gold as tangible assets that provide a sense of security, stability and returns in the form of rent. These assets hold sentimental value and are associated with memories and legacy. The older generation grew up in an era when these investments were the primary wealth-building tools, making it harder for them to break away from this mindset. In addition to emotional attachment, they tend to invest heavily in traditional assets - real estate and gold, viewing them as symbols of security and legacy. However, this emotional attachment makes these assets illiquid, leaving them unable to generate regular income for day-to-day comfort.

Invisible burdens-Inflation, healthcare and over-giving:

Beyond emotional letdowns, there is the real challenge of rising costs. Medical inflation in India is growing faster than general inflation. A single health emergency can wipe out years of savings. Many senior citizens also deplete their retirement funds supporting their children’s education, business or weddings. While done with love, it can leave them financially vulnerable later in life.

Generational shift:

Younger generations today value mobility over inheritance, convenience over nostalgia. They are choosing apartments near work, rental flexibility and minimalist living over ancestral homes. The generational shift in financial thinking leaves many senior citizens feeling disconnected and even disappointed.

Changing trends and priorities:

The younger generation, in contrast to their elders, prefer simplicity and minimalism. The next generation are witnessing a significant shift in their investment preferences as well. They are moving away from traditional investments, which were once considered safe and reliable. Instead, they are exploring new avenues such as stock, mutual funds, income plans and even cryptocurrency. This shift can be attributed to various factors, including the desire for higher returns, ease of diversification and the influence of global investment trends.

One such example of the younger generation not being interested in traditional assets is of one senior citizen, who died aged 85. His wife had predeceased him. One son lives in London and the other in New Zealand. They have the nationality of those countries. Neither was interested in the house their father had built in his prime age.

The father had written a will before his death to give all the property equally to both his children. The sons did not have time to get all the property in their names and then sell it. Both made a power of attorney to sell the property in someone’s name. Thereafter the proceeds from the sale of the property were sent to their home country.

Benefits of financial planning:

It is important that senior citizens live life to the fullest and explore the reasons behind their emotional investments. It is high time they understand the changing taste and priorities of the younger generation and the rising costs faced by senior citizens. There is a need for the senior citizens to utilise a portion of their wealth for their own comfort and happiness. Going for financial planning like having a well-structured retirement plan can ensure that they have enough funds set-aside for emergencies and long-term care, while allocating money for travel, leisure and other personal interests. The seniors should explore annuity plans; systematic withdrawal plans from mutual funds with a steady income stream without depleting their core assets. Ultimately, Indian senior citizens need to prioritise their own well-being and happiness, breaking free from the cycle of living economically to make the next generation rich.

Self-care and setting an example:

Retirement should be about fulfilment. Senior citizens should travel, pursue hobbies, attend cultural events, or just enjoy quiet time with friends. These are not luxuries but are essential to a rich life. They should not forget the power of community like joining clubs, senior networks for emotional support, to combat loneliness and foster a sense of belonging. By prioritising their own well-being, embracing change, and spending meaningfully, they can rewrite what ageing looks like. They can prove that it’s possible to live rich - not just financially but emotionally and spiritually. The biggest gift seniors can give their children is not a house or a gold chain but life well-lived.

The irony is that many senior citizens live frugally, sacrificing pleasures, only to die wealthy. They were in a way, poor in life but rich in death.

There is a need for senior citizens to focus on personal well-being and happiness, diversification into annuities, mutual funds, and income plans to balance financial security with comfort and enjoyment, in addition to balancing the children’s education etc.

Further they should break free from the habit of extreme thrift, enjoy the fruits of their hard work, and “live rich” rather than merely “die rich”.

(The writer is a retired IFS officer)