Is India’s Retirement Age Stacked Against The Salaried Class?

The other day, I was pleasantly surprised to read a front-page article in The Economic Times titled “Retired, Not Tired: Vets, the Fresh Faces of the C-Suite.” The article discussed how retired and superannuated senior executives are increasingly being hired to efficiently navigate an ever more complex and volatile business landscape. Essentially, these “battle-tested” leaders are being drawn back into fresh operational roles. Quoting Prime Database, the article noted that at least 90 such retired executives have been rehired.

This news was music to my ears, as I have always been against retirement.

In fact, I have long been a votary of extended working hours—advocating three shifts in Indian courts with no summer or winter vacations, and government offices functioning six days a week. I strongly believe that only when the entire country works longer hours can we become a competitive economy like Japan, China, or South Korea and raise our overall standard of living. Despite being a $4.13 trillion economy, India’s per capita income remains abysmally low at $2,878, or roughly Rs 2.6 lakh.

Of course, Prime Minister Narendra Modi leads from the front, reportedly working nearly 18–20 hours a day.

Coming back to my pet subject—retirement—I firmly believe the system is loaded against the salaried class. The timing is deeply unjustified. Employees in banks, the private sector, and public enterprises generally move up on a time scale, and just when a person is at the prime of their career—performing at their peak—they are forced to call it a day because of mandatory retirement.

In India, the official retirement age in the private sector is 60. In government services, public sector companies, and banks, it ranges between 58 and 60 years. High Court judges retire at 62, while Supreme Court judges retire at 65.

It is common knowledge that most middle- and upper-middle-income earners are caught in a relentless rat race, burdened by multiple loans. Generally speaking, after 50, people are no longer distracted by parties, social indulgences, or other diversions. They are focused on their careers and families, weighed down by home loans, children’s education, and arranging funds for a daughter’s marriage.

Just when one is about to breathe easy—finally nearing freedom from EMIs—comes the bad news: retirement. In many cases, those living in government- or company-provided housing are forced to use their retirement savings to buy a home.

I vividly recall the case of a Deputy Managing Director of the State Bank of India. Throughout his career, he lived in Buena Vista Housing Society near Mantralaya in Mumbai. One day, I met him at CST station as he boarded a Harbour Line train to Belapur. He told me he had retired and bought a house in far-flung Belapur, Navi Mumbai, using his retirement funds. Overnight, the lifestyle of an honest banker had dramatically changed. I felt deeply saddened.

Typically, it is in the last 10–12 years of one’s working life that careers peak—promotions, higher salaries, perks, and influence. Then comes the inevitable tragedy: a long-service award and a farewell cake.

In India, most organisations, as a matter of policy, do not encourage extensions—unlike in the West. This is largely due to our demographic dividend: nearly 55% of India’s population falls within the 18–50 age bracket, making talent abundant and relatively inexpensive. The same cannot be said of countries like Japan, China, or the United States.

In most developed nations, the retirement age is around 67, but people are encouraged to work until 70. In the U.S., retirement in most sectors is a choice, not a date—you can work as long as your health permits. In some countries, governments are being forced to raise retirement ages due to ageing populations, even though employees often resist the move.

Here is a quick snapshot of retirement ages globally:

·       USA: 67

·       Japan: 65

·       Germany: 67

·       UK: 66 → 67 → 68

·       South Korea: 63 → 65

My gut feeling is that in India, most people do not want to hang up their boots and spend their days babysitting grandchildren or going on pilgrimages. In this ghor kalyug, no one wants to be a burden on their children—or risk being quietly packed off to a senior citizens’ home.

Whether government servants, bankers, PSU managers, or private-sector employees, most would prefer the best of both worlds: invest their retirement benefits in mutual funds and take up another job, enjoying the reassuring comfort of an SMS at month-end confirming that their salary has been credited.

Perhaps this is why so many retired PSU managers and bureaucrats move into the private sector. They are outstanding managers in every sense, and the private sector is more than happy to hire them, given their deep understanding of how the government functions.

Consider a few examples. Soon after Dr S. Jaishankar (71), IFS, retired, Tata Sons appointed him President, Global Corporate Affairs in 2018. Destiny, however, had bigger plans—Prime Minister Modi inducted him into the Cabinet as External Affairs Minister in 2019, a position he continues to hold. Amitabh Kant (69), IAS, former CEO of NITI Aayog, India’s G20 Sherpa, and the driving force behind Incredible India, has joined Fairfax Financial Holdings as a senior advisor. Former Finance Secretary Tarun Bajaj joined Hindustan Unilever as an independent director. Former Central Vigilance Commissioner KV Chowdary landed a high-paying role with Reliance Industries. Former Comptroller & Auditor General Vinod Rai joined the board of Apollo Tyres. Two former SEBI chiefs—M Damodaran and UK Sinha—found board positions as independent directors in major private-sector companies.

These examples prove two things. First, even highly accomplished individuals need jobs after retirement. Second, young or mid-level managers—no matter how brilliant—cannot easily replace such multi-dimensional talent.

One major advantage the West enjoys is the ease with which retirees can find gig work—no questions asked. In India, however, there is a deep-seated mindset against employing older people. It often turns into a virtual Spanish Inquisition by neighbours, relatives, and friends if seniors continue working. It is almost treated as sacrilege.

Thanks to the demographic dividend, political parties in India have largely ignored this issue—raising the retirement age is seen as blocking jobs for the youth. But a balanced look at the pros and cons reveals a win-win for both employers and employees. For organisations, it helps preserve cash flows. According to publicly available data, during 2024–25 the Employees’ Provident Fund Organisation settled over 5 crore claims amounting to more than Rs 2.05 lakh crore. Imagine the advantage if even 50% of this payout were deferred by five years.

In the final analysis, given that average life expectancy today is around 73, it makes eminent sense to increase the retirement age to 70.

Is the Prime Minister listening?