Zerodha's Nithin Kamath shares 5 tips to evade 'retirement crisis'

Zerodha co-founder and CEO Nithin Kamath.

Zerodha co-founder Nithin Kamath recently shared five tips for Gen Z and millennials to evade "retirement crisis".

Kamath pointed out that with life expectancy going up and the retirement age coming down, in 20 years, professionals may have to face about 30 years in retirement when they have no active source of income.

Calling this the "retirement crisis", he tweeted, "What Gen Z and even millennials don't think about enough is that the retirement age is dropping fast due to technological progress and life expectancy going up due to medical progress. In 20 years, retirement could be at 50 and life expectancy at 80. How do you fund the 30 years?"

What Gen Z & even millennials don't think about enough is that the retirement age is dropping fast due to technological progress & life expectancy going up due to medical progress.
In 20 years, retirement could be at 50 & life expectancy at 80. How do you fund the 30 years? 1/5

— Nithin Kamath (@Nithin0dha) October 29, 2022

In a Twitter thread, the co-founder of India's largest stock broking firm Zerodha explained five ways in which these 30 years can be funded successfully.

1.)  "Stop getting triggered by everyone trying to lend and stop borrowing to buy things you don't need or depreciate in value."

2.)  "Start saving early. Diversify across FDs/G-Secs and SIPs of index funds/ETFs. Stocks are probably still the best bet to beat inflation long term."

3.)  "Get a comprehensive health insurance policy for yourself & everyone in the family. One health incident is enough to push most people into financial ruin or set them back many years financially. Jobs don't last forever, hence one policy outside of what is provided at work."

4.) "If you have dependents, they should be covered if something happens to you. Buy a term policy with adequate cover. In the worst case, this money in a bank FD should cover their financial needs."

5.) "But the biggest fix for most people is that they should stop taking loans! "

Terming "retirement crisis" as arguably the biggest crisis to hit most countries 25 years from now, Nithin Kamath added, "If climate change doesn't kill us all, retirement crisis will probably be the biggest problem for most countries 25 years from now. Earlier generations got lucky with long-term real estate and equity bull markets that helped create a retirement corpus. Unlikely in the future."

Read more: 'How to become a co-founder at Zerodha?' Nithin Kamath's response is winning internet