As the region’s population ages, younger generations are retiring later to save more
In the Philippines close to a half of today’s retirees express regret over past financial decisions with the biggest reasons being not saving enough (73%), followed by not investing wisely (47%), and retiring too early (38%).
66% of respondents will leave planning for retirement expenses within 5 years of retirement.
Younger respondents are adjusting expectations in light of looming challenges, including delaying their retirement. Primary reasons include the need to save more (59%), the desire to remain active (59%) and the need to cover increased living expenses (46%).
Manila, PH (23 October 2024) – As Asia Pacific faces a significant demographic shift with nearly one in four over the age of 60 by 20501, new research by Sun Life Asia reveals challenges and opportunities for retirement planning across the region.
The research, titled Retirement Reimagined: facing the future with confidence, surveyed over 3,500 respondents across mainland China, Hong Kong SAR, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam, about their aspirations and planning practices as they prepare for old age.
Majority are ill-equipped to deal with financial realities of retirement
The research reveals a growing desire for independent financial security in old age as retirement plans shift from government pension programs and reliance on family to prioritizing individual savings and investments. Saving for retirement was cited as the number one financial goal over the next 12 months across all age groups surveyed. However, many are ill-equipped to deal with financial realities, with 50% saying they will plan for retirement expenses five years or less before retirement, while a worrying 13% will not plan for this at all.
“The retirement landscape in Asia is undergoing a profound transformation, driven by increased longevity and shifting societal norms,” David Broom, Chief Client and Distribution Officer at Sun Life Asia said: David Broom, Chief Client and Distribution Officer at Sun Life Asia said. “Our research shows that while independent financial security is seen as the foundation for a rewarding retirement, many people remain unprepared for the realities they face. Early planning and disciplined saving are key to facing your golden years with confidence.”
Filipino retirees caught off guard by higher costs and regret insufficient preparation
While most respondents in Philippines save at least 10% of their income for retirement, an alarming 37% do not. When asked about planned sources of income in retirement, the average expectation was for 20% of income to be drawn from cash savings, underscoring a potential missed opportunity to maximize retirement income through investments and ensure it keeps pace with inflation.
In a warning sign to future generations, 21% of retirees in the Philippines expressed that they had not planned their retirement expenses. This has led to 25% of retirees being caught off guard by costs being
1 Source: Asia Development Bank: https://www.adb.org/what-we-do/topics/social-development/aging- asia
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