Most Filipinos lack preparation for their retirement, with average retirement savings to last them for 3.6 months, according to a survey conducted by Manulife. It is the lowest among eight markets in Asia.
The seven other markets included in the survey are Hong Kong, China, Taiwan, Singapore, Malaysia, Thailand and Indonesia.
On average, Asian investors have enough retirement savings for around 2.9 years. Investors in Taiwan have the highest retirement savings, which is equivalent to 4.5 years, according to the 2018 Manulife Investor Sentiment Index (MISI).
Ms Melissa Henson, senior vice president and chief marketing officer for Manulife Philippines, said the low retirement savings of Filipinos may stem from the belief that their family members would support them during their retirement, according to a report in The Philippine Star.
“What we found in our survey called ‘Ageing Asia’, that we did three years ago, was that the Philippines actually ranked the highest in terms of expectations that a family member will help support a family member during his or her retirement,” Ms Henson said.
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She also cited another MISI survey conducted in 2016, which showed that even some millennials expect to receive support from their children or ageing parents when they retire.
According to Ms Henson, this financial expectation resulted in a wide gap between Filipino’s current and ideal retirement savings.
In addition, Filipinos believe that savings equivalent to 2.1 years’ worth of personal income would be enough for retirement, the lowest expectation in the region. She said the ideal savings level for Filipinos should be at least 10 years.
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“Assuming you will retire at 60, the average life expectancy in the Philippines is close to 70 years old. So that’s at least 10 years of life expectancy beyond retirement. That’s the minimum that we should save for,” she said.
The survey also shows:
- 84% of the Filipino respondents said they are looking to continue working after their retirement, either on a full-time or part-time basis.
- About 66% of the respondents said this is to keep them busy and occupied, 65% said this would be good for their physical and mental health, and 63% said they would like to pursue their interests and to enjoy life.
- 59% of respondents said they expect to keep working beyond retirement due to financial considerations, such as maintaining or improving their living standards.
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