Over the past few years, the financial priorities of Indian households—especially among the middle class—have seen a marked shift. The COVID-19 pandemic, followed by job disruptions and a surge in retail investing, has reshaped how families think about money. There’s a growing focus on building financial resilience, planning for uncertainty, and moving beyond just high-return investments.
From emergency funds to retirement strategies, individuals are increasingly seeking clarity and structure in their financial lives. At the same time, generational differences in attitudes toward money—ranging from capital preservation in older generations to risk-taking among Gen Z—are pushing financial advisors and platforms to rethink their approach.
In an email interaction, Priyank Shah, Co-Founder And CEO of The Financialist, shares his observations on the evolving landscape of financial planning in India. He offers insights into how different income groups should approach key life goals, how inflation affects retirement planning and more.
After Covid-19, the financial priorities have shifted from just chasing returns to building for resilience and safety. The middle-class Indians are more wary of emergency funds and insurance planning. Meanwhile, the stock market boom brought new retail investors in, but it also exposed many to risk without a strategy.
While tech integrations and apps made it easier for people to execute and buy products, the advisory layer guiding on what, when, and how much to execute was still missing in the system. There is a greater demand for transparent, conflict-free advice. At the same time, regulatory pushes from SEBI are pushing the industry toward trust and data-led planning. Clients are looking for holistic solutions, not just product recommendations, and want advisors who align with their goals, not commissions.
The foundation of any financial plan should begin with creating an emergency buffer, something that provides peace of mind during uncertain times like job loss or medical emergencies. Once that’s in place, families should work on optimising retirement benefits available through employer schemes. One must split their goals into long-term and short term to decide their investment allocation between equity and fixed income products.
Investments should be executed on the basis of the priority of these goals. One must avoid generalizing monthly investment requirements to their income as two families with similar income but different backgrounds, goals, and obligations will have different investment plans.
Government-backed schemes like the Senior Citizens’ Savings Scheme (SCSS) offer attractive, stable returns and are a valuable component of a retirement portfolio, especially for generating predictable income. However, in today’s inflationary environment, relying solely on such fixed-income instruments may not be enough.
Retirees need to strike a balance. A 100% allocation to fixed income may preserve capital but risks erosion of purchasing power over time. On the other hand, a 100% equity portfolio, while inflation-beating in the long run, may be too volatile to support consistent withdrawals during market downturns.
The optimal approach is a balanced allocation between equity and fixed income. Equity provides growth and helps the portfolio keep pace with inflation. On the other hand, the fixed income ensures stability and facilitates uninterrupted withdrawals, especially during equity market corrections.
Products like SCSS can be part of the fixed income allocation.
The remaining can be invested in traditional banking products and mutual funds. Retirement should be treated as a dynamic phase that needs periodic adjustments, not a one-time setup.
If their emergency fund is secure, they must lay down lifestyle requirements. What does their ideal retirement look like? This includes estimating monthly expenses, healthcare needs, travel, and leisure. Once this is mapped, they can factor inflation into this and calculate their target corpus. During income earning years, risk tolerance is naturally higher.
This is when the allocation of equity can be heavy through diversified equity exposure. As they approach retirement, risk tolerance becomes lower. The portfolio should gradually shift towards a more balanced mix, focusing on capital preservation and income generation. Regular reviews, rebalancing, and tax optimisation will help stay aligned to the goal while managing volatility.
Older generations typically aim to sustain their lifestyle with reliable income streams. Their priorities include capital preservation, healthcare funding, and legacy planning. Our advice would be to focus on steady returns and ensure cash flows align with recurring needs. Financial products like MFs which allow systematic withdrawals are ideal.
Millennials are in their prime earning years with significant life goals like home ownership, children’s education, and early retirement. Their higher risk tolerance allows for a stronger equity focus. They can leverage growth assets now by opting for equity mutual funds and use fixed income only for short-term needs or stability.
Gen Z views wealth building differently. They’re inclined to invest in themselves, pursue side hustles, and explore unconventional assets. Flexibility and access are key. They value experiences and aren’t afraid to experiment with new things. This shift in mindset often brings towards riskier assets like cryptocurrency.
If they have the risk appetite they can also. Wealth managers need to first understand these differences in wants and then proceed to plan for the respective group. Each generation has different fears, dreams, and risk profiles. Strategy needs to match life stage, not just income or age. Good advice cannot be one-size fits all.
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