At the official launch of DBS Bank and Manulife Financial Asia’s 15-year regional life bancassurance partnership, the two companies – with the joint vision to be the leading provider of retirement and insurance solutions in Asia – released the results of their research study conducted to understand the retirement aspirations and challenges faced by individuals in the region.
According to the “DBS-Manulife Retirement Wellness Study” which aims to uncover the retirement attitudes, expectations and preparedness among pre-retirees in the region, Asians are most prepared with regard to their health, and least prepared on the wealth front.
The 3 building blocks of successful retirement
The Retirement Wellness Index used in the study measures retirement preparedness based on the three building blocks of successful retirement, namely the key pillars of health, wealth and social aspects. (See Figure 1)
The index is a weighted average of various attributes across the three pillars, taking into account respondents’ current behaviours and expectations towards retirement, as well as the influence of each attribute. It is calculated on a 100-point scale, with a higher score suggesting better preparation towards retirement.
Asia’s retirement wellness index: 56
At the regional level, Asians scored 56 points on their retirement wellness. Across the three pillars, Asians are most prepared on their health aspects, scoring 62 points, while wealth is the least prepared area, scoring 48 points, for retirement. For social aspects, Asians scored 55 points. (See Figure 2)
Indonesians feel most prepared
The research spanned six markets, China, Hong Kong, India, Indonesia, Singapore and Taiwan.
By countries, Indonesians feel the most prepared for retirement. It scored 72 points. Among their top concerns during retirement are the ability to afford medical cost (28%) and not knowing who would be providing them care during retirement (28%). (See Figure 3)
Developed markets feel least prepared
Hong Kong residents, Singaporeans and Taiwanese are relatively less prepared across all aspects of retirement, with Hong Kong scoring the lowest at 39 points in the retirement index.
In Singapore, which scored 46 points, two in five pre-retirees do not feel confident about their preparations for retirement. Although 77% have tried to figure out how much they need to save for retirement, only 19% are fully aware of the exact amount needed. More than half (56%) of those who have started retirement planning did not seek any form of advice.
On the health front, 38% of Singaporeans are worried about their ability to afford medical costs when they retire, while on the social front, decline in mental health comes across as the top social concern for 45% of the respondents.
Retirement a hot issue in Asia
Mr Richard Vargo, Regional Head of Bancassurance, DBS Bank, said: “The ‘DBS-Manulife Retirement Wellness Study’ provides an insightful look into the retirement attitudes and challenges faced by one of the most dynamic regions in the world. Retirement in Asia is a hot issue; populations are ageing, workforces are shrinking, and many are underestimating the amount they need to lead the retirement lifestyle that they want.”
Citizens in Asia aged above 60 are expected to triple from 438 million in 2010 to 1.3 billion in 2050. By then, two-thirds of the world’s elderly will be in Asia; one in four will be over 60, and 19% of those will be over 80.
Seek professional advice early
And when planning for retirement, it is important that professional help is sought early. “For example, Singaporeans hold high expectations for their retirement years, but many are leaving it too late to make their hopes a reality. We encourage Singaporeans to seek professional advice early to plan and review their options for their retirement,” he concluded.
6,068 pre-retirees aged 40 to 60 across the six markets – China, Hong Kong, India, Indonesia, Singapore and Taiwan – completed a 25-minute online quantitative interview conducted from 7 to 26 November 2015. Demographic quotas were set, based on age, gender and monthly household income to ensure national representation in the country.