The Great Unraveling: How Every Safety Net Our Parents Had Has Been Pulled Away From Us
Open your bank account right now. Check your balance. Now calculate your monthly expenses. The difference between these two numbers is your safety net. If, God forbid, you lose your job tomorrow, this amount will save you. If your parents are hospitalized, this amount will save you. If your company goes through layoffs, this amount will save you.
But for most people, this amount isn't very large. Perhaps it isn't large for you either. And this is not your fault. Growing this amount is incredibly difficult. That emergency fund everyone talks about? It can take years and years to accumulate. And those who cannot manage to build one, they start believing there must be some deficiency in them, some shortcoming. They think every person out there is sitting with a fully-funded emergency fund, that this is some basic foundation, and that they themselves must be terrible with money.
Then we look at our parents. On a decent salary, they lived their lives fully. They raised a family, educated their children, bought a house, bought scooters and cars, and now their retirement is going reasonably well. Meanwhile, I earn five times more than they did, and I cannot even manage to pay my monthly rent on time.
Do you know the truth, my friend? In our parents' time, that difference between bank balance and expenses didn't matter as much to them, because they had safety nets. Several safety nets. Things they kept saving, and slowly, gradually, one by one, those safety nets were snatched away from us.
Today's generation has been told: stand on your own two feet. Nobody is coming to save you. You will build your life from your salary alone. And all those support systems that your parents had around them? Those no longer exist for you. You have to live this life standing on your own feet, making every decision yourself. Nobody is coming to save you.
Let us talk about those safety nets. Let us understand how, one by one, each support was taken away from us, and how this generation now has to live life entirely on its own decisions.
Safety Net Number One: The Joint Family System
The first safety net our parents had was the joint family. The joint family was a cushion that could absorb shocks and save you. Until the 1970s, a household typically consisted of parents, one or two children, and the extended family. After the Green Revolution and various economic shifts, India began its rapid transformation toward the nuclear family.
But the shift hasn't stopped at nuclear families. It has gone even further. We are now witnessing the rise of single-person households, where only one individual lives in a home. After the pandemic, the percentage of single-person households rose to around 33 percent. The growth of nuclear families has plateaued, but approximately 9 million people in this country now live alone.
The second transformation is geographic displacement. People no longer work where their roots are. They have left their cities, their villages, their towns, and migrated elsewhere for work. Naturally, their support system has been stripped away from them. Where a family once had ten people to share the load, now there isn't even one.
And here is another crucial fact: our country is quite young demographically. But we must also talk about the senior citizens. There are roughly 140 million people in India who are senior citizens, without pensions, without any retirement corpus. Their retirement plan is their children. So you were already in a nuclear family, and now the responsibility of your parents also falls on you.
Safety Net Number Two: The Defined Pension System
If your parents worked in a government job, whether in the Central Government, State Government, public sector banks, railways, armed forces, or any of the numerous statutory bodies, they had what was called the Old Pension Scheme, or OPS. The OPS was a remarkable thing. At the time of retirement, whatever your basic salary was, you would receive 50 percent of that, plus a Dearness Allowance. And the government took on all the risk — market risk, longevity risk, the risk that you might live until 70, or 90, or 95 years.
In 2004, this was changed. The New Pension Scheme, or NPS, was introduced. Under NPS, the corpus you accumulate depends on market performance. If the market crashes right when you retire, that is your problem now. The NPS is not a bad product in any sense, but the guaranteed, defined benefit that existed before is gone. You take on the market risk. If you live long, God bless you, but if your corpus runs out at age 82, there is nothing left.
Recently, the government launched the Unified Pension Scheme, or UPS, which is a hybrid approach, but it still does not come with the guaranteed, defined lifetime benefit that the old system provided. Those comprehensive benefits are simply no longer there.
Safety Net Number Three: Lifetime Health Coverage
In 1954, the Central Government Health Scheme, or CGHS, was launched. This was essentially lifetime health coverage. Not for one year, not for twenty-five years, but for life. Then in 2003, the Ex-servicemen Contributory Health Scheme, or ECHS, was launched, providing lifetime coverage for members and their dependents.
There was no concept of purchasing a health insurance policy. You were covered for life. You were secure.
What exists today? You are a competent employee, and your company gives you a health insurance policy with coverage of around 3 to 10 lakh rupees. Life insurance is a joke in these corporate packages. Health insurance, let's say, is decent. But the moment you leave that job, the policy lapses. Yes, there is portability, but portability comes with a very important clause: wherever you transfer the policy, to an individual plan, the insurer will underwrite you all over again. They will go through the evaluation from scratch. And if they find that during the time you were working, God forbid, you developed some illness, some condition, they will insert clauses. Pre-existing disease waiting periods will appear. Certain coverage might be denied. Whatever the case may be, it is not straightforward.
And the worst part is that when you stop working, it is over. There is no health coverage. But that is exactly when you need it the most. When we are in our 20s and 30s, we can manage our health somewhat. But after 60, that is when hospital visits begin. If we don't have that health coverage option at that age, where will we go?
This is exactly the gap that needs to be filled. And this is why having your own independent health insurance policy, one that is not tied to your employment, is absolutely critical.
Safety Net Number Four: The Family Home as an Asset
There was a very large safety net that almost every person had in those times: a home. There was some ancestral land somewhere, a small house, even a humble dwelling. It worked. It was a place to live. And it was also a very important financial backup.
I work with many people on money matters. Some are trapped in loans, some in bad financial situations, but they have land in the village, they have a house somewhere. And that is a massive factor in them still maintaining their sanity. Because if, God forbid, you get trapped in loans today, and you are working in a city, living on rent, where everything is rented and nothing is owned, if anything goes wrong, you are finished. There is no asset. There is nothing.
And buying a house has become completely out of reach. There is something called the affordability index, which essentially says that if a house costs about four and a half times your annual income, it is considered affordable. Now look at what is happening in Indian cities. There is not a single major city in this country where the average house price is within four and a half times the average salary. Not even close. Not even remotely close.
For the common person, buying a house has become virtually impossible. Our parents somehow bought houses. My own parents bought their house when they were around 50 years old. It cost 10 lakh rupees at that time. That was a very large amount back then. But they bought it somehow, struggling, stumbling, even defaulting, but they bought it.
But if someone wants to buy a house today — the house we live in would cost around 4 to 4.5 crore rupees. Even thinking about it feels like madness. Even if I put down 1 crore rupees as a down payment, which itself is enormous, I would still need a loan of 3.5 crore rupees. A loan of 3.5 crore rupees means an EMI of roughly 3.5 lakh rupees per month. That means 40 to 45 lakh rupees per year just for the house EMI. Even if you consider a house worth 50 to 60 lakh rupees, which is nearly impossible to find in a decent city, but even if you find one, you would pay 10 lakh rupees as down payment, which is still huge. You would have a loan of 50 to 60 lakh rupees, with an EMI of 50,000 to 60,000 rupees per month. If your annual income is around 7 lakh rupees, your entire salary would go toward the house EMI. What will remain? What will you eat? What will you invest? It is crazy how expensive housing has become in this country.
Safety Net Number Five: Lifetime Employment
And the final safety net: lifetime employment. I think this is the biggest shift of all. When our parents started working, whenever they began their careers, at age 24, 26, whatever it was, they could think about retirement. They could think that at age 60, they would retire. We, even if we want to think that way — and this generation doesn't think that far ahead — but even if we wanted to, it is simply not possible.
Every 4 to 5 years, technology advances so rapidly that companies change, entire industries become obsolete, your job transforms. The work you were doing before, the work you studied so hard for, gets automated out of existence within 5 to 10 years. The concept of lifetime employment simply does not exist anymore.
So if someone today is 25 years old, and he or she has to think about how to ensure a guaranteed income until age 60 — guaranteed not in the sense of a fixed amount, but simply ensuring that there will be some source of income until age 60 — that question is incredibly hard to answer. Because nobody knows which field will still have work opportunities for the next 35 years. Nobody knows which industry will survive.
Our parents had a joint family, with brothers and sisters and a large network of connections, and that provided a safety net. They had a defined pension with lifetime coverage. They had government health schemes that covered them for life. They had a home, an asset that provided security. And they had jobs that lasted until retirement.
Today, the only safety net you have is you. Your salary. Your skills. Your luck. And your hard work. You are being called upon, from all of this, to build your own life. Give your parents a dignified retirement. Give your siblings a secure life. Build a prosperous future for yourself and your family. Everyone's eyes are on you. And the truth is, no generation before you has faced this. Somewhere, somehow, there was always some protective shield around them. You are the first one from whom all five have been snatched away, all at once.
Building Your Own Safety Nets: What Is In Your Control
Yes, this is overwhelming. The video ends, you feel like crying, then you go to Instagram, watch some reels, start laughing, and life goes on. But nothing changes. And something has to change.
So let us talk about two safety nets that you can build for yourself. Two safety nets that are entirely within your control, that do not depend on the government, do not depend on your employment, do not depend on anyone else.
The First Safety Net: Health Insurance
Health insurance is significantly cheaper when you are young. Let me give you the numbers. Suppose you want a good quality health insurance plan with coverage of 15 lakh rupees for your healthcare needs. At age 25, it will cost you approximately 960 rupees per month. That is less than a dinner out for two. If you take this same exact health insurance policy, with the same 15 lakh rupee coverage, at age 60, it will cost you around 70,000 rupees per year, which is approximately 5,500 rupees per month. And even then, there will be many restrictions. Pre-existing disease clauses will be there. Mandatory co-payments will be inserted. Several other conditions will be added. Because your age has become a factor.
But this is an asset that depends on nobody else. It does not depend on your employment. Not on the country. Not on the government. It depends on you. You are responsible. It is in your custody. And you can secure yourself with it.
I look at it this way: health insurance pricing is very simple. The younger you are, the cheaper it is. And waiting even one year can make the same policy approximately 35 percent more expensive. Every year you delay, the cost increases.
The Second Safety Net: Term Insurance
At age 25, if you take a 20-year term insurance plan with coverage of 1 crore rupees, it will cost you roughly 9,000 rupees per year. That is about 750 rupees per month. The same coverage, if you try to take it at age 35, will cost approximately 16,000 rupees per year. Nothing else will have changed, except your age.
This was perhaps the most important financial decision of my life. The realization that if something happens to me, this 10 crore rupees in term insurance coverage can keep my family secure. My children's education can continue. My wife can live her life safely. Whether the house stays or goes, this 10 crore rupees will be there. It will not replace me, but it will replace the financial value I brought to the household.
Citations and References
The data and trends referenced in this article draw upon several well-documented sources and publicly available information:
- Old Pension Scheme (OPS) and New Pension Scheme (NPS): The transition from defined-benefit to defined-contribution pension systems for government employees occurred in 2004, as documented by the Government of India's Ministry of Finance and the Pension Fund Regulatory and Development Authority (PFRDA).
- Unified Pension Scheme (UPS): Announced by the Government of India in 2024 as a hybrid approach combining elements of both OPS and NPS for central government employees.
- Central Government Health Scheme (CGHS): Established in 1954, CGHS provides comprehensive healthcare to central government employees and pensioners, as documented on the official CGHS portal.
- Ex-servicemen Contributory Health Scheme (ECHS): Launched in 2003, ECHS provides lifetime healthcare coverage to ex-servicemen and their dependents, administered by the Ministry of Defence.
- Nuclear Family and Single-Person Household Trends: Census of India data and various sociological studies document the shift from joint families to nuclear families, with single-person households rising notably post-pandemic.
- Housing Affordability Index: Reports from real estate research firms and financial institutions, including the Reserve Bank of India's housing price index data, indicate that housing in major Indian cities significantly exceeds the affordability threshold of 4.5 times annual income.
- Employment and Technological Disruption: Studies from organizations such as the World Economic Forum, NITI Aayog, and various labor economics research papers document the rapid pace of technological change and its impact on job security and lifetime employment patterns.
- Health Insurance and Portability: Guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI) outline the portability provisions and underwriting requirements for health insurance policies.
- Demographic Data on Senior Citizens in India: The 140 million senior citizens figure aligns with census projections and reports from the Ministry of Social Justice and Empowerment, highlighting the scale of the retirement challenge without formal pension coverage.
Conclusion
The landscape of financial security has fundamentally transformed across generations. Here are the key takeaways:
- Five major safety nets that protected previous generations have been systematically dismantled: the joint family system, defined-benefit pensions, lifetime health coverage, accessible housing, and lifetime employment.
- The joint family, which provided emotional, financial, and practical support through multiple earning and caregiving members, has given way to nuclear families and an increasing number of single-person households.
- Defined pension schemes that guaranteed lifetime income post-retirement have been replaced by market-linked contribution schemes, transferring longevity and market risk onto individuals.
- Lifetime government health schemes that covered employees and their dependents indefinitely have been largely replaced by employer-dependent health insurance that lapses when employment ends.
- Housing affordability has deteriorated to the point that the average house price in major Indian cities is nowhere near the 4.5-times-annual-income affordability benchmark, making homeownership virtually impossible for many.
- Lifetime employment is no longer a realistic expectation, with technology and industry disruptions occurring every 4-5 years, requiring constant adaptation and skill development.
- Unlike previous generations, today's individuals bear almost complete responsibility for their financial security, with no institutional or familial fallback systems.
- Two safety nets that remain within individual control are independent health insurance and term life insurance, both of which are significantly cheaper when purchased at a younger age.
- Health insurance at age 25 costs approximately 960 rupees per month for 15 lakh rupees of coverage, while the same policy at age 60 can cost upward of 5,500 rupees per month with additional restrictions and waiting periods.
- Term insurance at age 25 costs approximately 9,000 rupees per year for 1 crore rupees of coverage, while the same coverage at age 35 costs approximately 16,000 rupees per year.
- These independent safety nets do not depend on employment, government policy, or anyone else — they are entirely within the individual's control and responsibility.
- Waiting even a single year to purchase health insurance can increase premiums by roughly 35 percent, making early action financially advantageous.
- While this generation faces unprecedented challenges and the removal of traditional safety nets, building personal financial protection through insurance is a concrete, actionable step toward reclaiming security.
