Executive Summary
By 2050, close to 1.3 billion people in Asia Pacific — one in four people — will be over 60 years old.1 This significant demographic shift, as large segments of the population reach old age and live longer, will create new challenges and opportunities for societies across the region. For younger generations, early planning and careful decision making are paramount to ensure they achieve their goals, and their finances go the distance in their golden years.
Our survey of 505 Singaporeans and more than 3,500 respondents from mainland China, Hong Kong SAR, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam reveals the aspirations and planning of people across the region as they prepare for old age, and the reality lived by today’s retirees.
Key insights:
Independent financial security is emerging as the cornerstone of a fulfilling retirement
Financial security as the foundation of a fulfilling retirement emerged as a common thread when exploring perceptions of life in its later years. The landscape of retirement planning is shifting. In addition to the Central Provident Fund (CPF) scheme (including voluntary CPF top-ups) and reliance on the family, holistic retirement plans may also include individual savings, insurance and investments.
Many are un-prepared and unsure
For today’s workers, saving for retirement was most commonly ranked as the number one financial goal over the next 12 months, indicating a healthy awareness of the importance of financial security in later life. However, 42% (compared with 59% across Asia) will leave planning around retirement expenses until five years or less before retirement, and 15% will not plan for retirement expenses at all. This short horizon will leave many unprepared for the financial realities, potentially delaying their ability to retire comfortably.
While most save at least 10% of their income for retirement, 29% do not. When asked about planned sources of income in retirement, the average expectation in Singapore was for 32% of income to be drawn from cash savings, representing a potential missed opportunity to maximise retirement income and ensure it keeps pace with inflation.
Retirees are struggling with the cost of living and healthcare
In a warning sign to future generations, 16% of Singaporean retirees admitted they had not planned their retirement expenses. This has led to 18% of retirees being caught offguard by higher-than-expected costs (11% Asia average), a number that looks only set to grow as inflation continues to bite. For those caught off guard, the key factors in the higher-than-expected costs are the general cost of living (64%) and healthcare costs (43%). In response, many have been forced to cut spending (57%) and liquidate investments (50%).
The biggest regret for retirees is not saving enough
Approximately 14% of Singaporean retirees (23% Asia average) express regret over past financial decisions, underscoring the importance of informed and proactive planning. The number one regret was not saving enough (55%), not investing wisely (55%), and retiring too early (45%).
Singapore’s working population has greater access to information and financial products than ever before, putting them in a privileged position to avoid the pitfalls of poor planning. Younger generations are more likely to seek help, with 37% consulting a financial advisor (34% for retirees) and 36% using a retirement calculator (32% for retirees).
Younger generations are adjusting expectations: retiring later and saving more
Younger respondents also seem well-aware of the looming challenge and are adjusting expectations accordingly. Current workers in Singapore anticipate retiring at an average age of 64, five years later than the average age that current retirees exited the workforce (59).
At the same time, 18% of non-retirees have postponed their retirement plans, compared to only 11% of retirees who did the same, reflecting changing economic conditions and personal circumstances. The primary reasons for delayed retirement include the need to save for retirement (60%), the need to cover increased living expenses (56%), and the need to cover health expenses (37%). Younger individuals are more worried by increased living expenses, with 62% of non-retirees citing it as a concern.
High-income respondents: A closer look
The survey shows that even high-income individuals face challenges in preparing for retirement – although their numbers are slightly better. 40% of high-income respondents will still leave planning for retirement expenses until five years or less before retirement, while 11% will not plan for this at all.
Similarly, 15% of high-income respondents save less than 10% of their income for retirement, highlighting that even those with higher earnings may be underprepared.
Among high-income retirees, 15% were caught off guard by higher-than-expected costs, despite only 4% failing to plan for their retirement expenses. Their primary concerns were the rising cost of living (50%) and the need to support younger family members more than initially anticipated (50%). In response, 75% of this group of high income retirees liquidated long-term income-generating investments, while 63% have had to cut daily spending.
While 14% of retirees overall express regret over past financial decisions, this figure was lower among high income retirees at 6%. The primary regrets for high income retirees were not investing wisely (100%), retiring too early (67%), not saving enough (33%), and not diversifying investments (33%).
For high-income workers, the anticipated retirement age is 64, six years later than current high-income retirees, who retired at 58. Additionally, 19% of high-income non retirees have actively postponed their retirement plans, compared to 18% of non-retirees overall.
Asia’s Gold Star Planners manage their golden years with confidence, while Retirement Rebels stumble
Across Asia our survey also sheds light on two distinct groups: the “Gold Star Planners” meticulously making retirement plans, and the “Retirement Rebels” who have none. The Gold Star group plan their expenses more than five years ahead of retirement, save more than 10% of their income for retirement, and are well-protected by insurance and pension products.
Comparing the Gold Star group to the Retirement Rebels, who have no insurance and pension protection, nor sufficient planning and saving around their later years, reveals interesting insights. Asia’s retired Gold Star Planners are more likely to stay within their expected expenses (73% vs. 31%) and less likely to regret post retirement financial decisions (14% vs. 40%). The Gold Star group are far more likely to consult professional sources on retirement planning such as financial institutions and independent advisers, and they are more confident about their health and financial wellbeing in their later years.
The greatest luxury is time
The number one aspiration for retirement is simple: spending quality time with family and friends (49%). This is followed by the prospect of escaping the daily grind of work and relaxing (16%), and giving back to society (15%). The greatest concerns associated with later years are health issues and physical decline (60%), factors that could put these dreams at risk.
Early planning and saving paves the way for empowerment later in life
The survey suggests that while people across Asia are actively saving for retirement, a significant gap remains, and many are not fully prepared for the financial realities. This is forcing many to delay retirement or scale back their goals as they adjust to the impact of increased living expenses.
To achieve their goals, individuals should consider a comprehensive approach to retirement planning that will provide an income that keeps pace with the rising cost of living and healthcare. By doing so, retirees can better protect their wealth and enjoy a more secure and fulfilling retirement.
As Asia stands at the crossroads of demographic change, the message is clear: proactive financial planning is needed to face the future with confidence and live every stage of life to its fullest.
Seven Gold Star planning tips to ensure an inflation-proof retirement:
How can you ensure that your retirement savings keep up with rising prices? Many save as much as they can each year and invest wisely over the long term.
