Over 1 in 10 APAC workers have no retirement plans

Some workers are postponing their retirement 

Over 1 in 2 (59%) of APAC individuals will only start planning for their retirement at five years or less before they throw in the towel, according to a new study by Sun Life Asia.

Over 1 in 10 (14%) of the 3,500 respondents— surveyed across China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam— said that they have no retirement plans at all.

“Our research shows that whilst independent financial security is seen as the foundation for a rewarding retirement, many people remain unprepared for the realities they face,” said David Broom, chief client and distribution officer, Sun Life Asia.

“Early planning and disciplined saving are key to facing your golden years with confidence,” Broom said.

Most respondents said that they save at least 10% of their income for retirement. However, almost 1 in 4 (23%) do not make any savings at all.

Respondents stated that their cash savings will make up 25% of their retirement income, which Sun Life Asia said spells a potential missed opportunity to maximise retirement income through investments and ensure it keeps pace with inflation.

Higher-than-expected costs
Separately, 1 in 4 (26%) retirees said that they had not planned for their retirement expenses, with 1 in 5 (20%) admitting that they were caught off-guard by the higher-than-expected costs.

For those caught off guard by higher costs, the key factors are the general cost of living (76%) and healthcare expenses (51%). 

Many retirees o cut spending (73%) and liquidated investments (29%) to cope with the expenses. 

Approximately 1 in 4 (23%) of retirees express regret over past financial decisions with the biggest reasons being not saving enough (66%), followed by not investing enough (52%), and not planning for healthcare costs (34%), Sun Life Asia found.

Postponed retirement
Younger respondents are anticipating an older retirement age, and some have postponed their plans to stop working.

Younger workers anticipate retiring at an average age of 64, five years later than the average age that current retirees exited the workforce (59).

Almost 1 in 5 (17%) of non-retirees actively have postponed their retirement plans, compared to only 8% of retirees who did the same, reflecting changing economic conditions and personal circumstances. 

Reasons cited for delayed retirement include the need to save more (61%), the desire to remain active (49%), enjoyment of work (46%), and increased living expenses (43%).

Meanwhile, those anticipating a later retirement age are more likely to cite increased living expenses (46%), compared to 19% among current retirees who delayed their exit from the workforce, according to Sun Life Asia.