Taiwan has a maturing retirement system with defined contribution plans playing an increasingly significant role; however, persistent gaps exist in long-term financial planning, particularly among younger workers according to a new study.
The 33-page new study "Retirement Readiness in Taiwan: Financial Security and Risk Perceptions" conducted by SOA Research Institute in collaboration with Reinsurance Group of America (RGA) on retirement readiness in Taiwan is based on a survey of 750 Taiwanese respondents across three age groups (prime age workers - ages 30-45, pre-retirees - ages 46-59, and retirees - ages 60-75) and was conducted in November 2024.
With more than 18% of Taiwan's population aged 65 or older, this study provides critical insights into the evolving retirement landscape in Taiwan, offering valuable information for insurers, policymakers, and financial advisors.
The study reveals a maturing retirement system with defined contribution plans playing an increasingly significant role. However, it also highlights persistent gaps in long-term financial planning, particularly among younger workers. It highlights shifts in retirement expectations and behaviours following the COVID-19 pandemic.
Major findings of the report include:
Financial literacy and education: 18% of respondents are not very knowledgeable or not at all knowledgeable about financial matters. Use of mobile apps for retirement information increased from 9% in 2018 to 19% in 2024.
Generational divide in planning: Retirees show higher engagement in retirement planning compared to younger cohorts. Calculating the amount of available assets and investments in retirement is the top action taken by respondents across all age groups.
Health concerns dominate: 96% of respondents worry about healthcare costs beyond social insurance coverage, which is ranked the top concern in retirement life.
Source of retirement income: Prime-age workers and pre-retirees are not confident that their retirement savings are sufficient. 82% of them expect to rely on full or part-time job earnings as part of their retirement income.
Preferred financial products: Guaranteed income (60%) and guaranteed returns (58%) are considered the most important features of financial or investment products to general retirement income.
Significant interest in annuity products: There is high interest in annuity products (89% for tax-deferred annuities, 93% for annuities with increased payments for critical illness), and 74% of respondents are willing to convert part of their savings into lifetime-guaranteed annuities.
RGA Taiwan CEO Jae Ho said, “The findings present clear opportunities for insurers to develop products that meet the evolving needs of Taiwan's ageing population. These show a strong consumer interest in innovative retirement products, particularly those offering protection against health-related risks and tax advantages. These insights underscore the potential for insurers to develop tailored solutions that enhance financial security for Taiwan's retirees.”
SOA MD R Dale Hall said, “The generational differences in retirement preparedness highlight the importance of early financial education and planning. This report provides valuable insights for wider collaboration across employers and insurers, and to encourage proactive retirement strategies across all age groups.”