Research in Vietnam by Sun Life Asia reveals a growing desire for independent financial security in old age, as retirement plans shift from state pension schemes and reliance on the family unit, to prioritising individual savings and investments.
Illustrative image (Photo: Sun Life Asia)
The research, 'Retirement Reimagined: facing the future with confidence', surveyed 510 respondents in Vietnam as part of a survey of over 3,500 people across countries including China, Indonesia, Malaysia, the Philippines, Singapore and Vietnam. The report aimed to understand their aspirations and planning practices as they prepare for old age.
Saving for retirement was cited as the number one financial goal over the next 12 months, across all age groups. However, many are ill-equipped to deal with financial realities, as 67% will leave planning around retirement expenses until five years or less before retirement and 7% will not plan for this at all.
While most respondents save at least 10% of their income for retirement, an alarming 23% do not. When asked about planned sources of income in retirement, the average expectation was for 25% of income to be drawn from cash savings, underscoring a potential missed opportunity to maximise retirement income through investments and ensure it keeps pace with inflation.
For current retirees, 26% admit they had not planned their retirement expenses, leading to 20% being caught off guard by higher-than-expected costs. This trend is expected to grow as inflation impacts living standards.
For those caught off guard by higher costs, the key factors are the general cost of living (76%) and healthcare expenses (51%). In response, many have been forced to cut spending (73%) and return to the workforce (33%).
However, the future looks brighter as younger generations are adjusting their expectations. They anticipate retiring at an average age of 64, this change reflecting a growing awareness of economic conditions and personal circumstances. The primary reasons for delayed retirement include the enjoyment of work (46%), the need to save more (61%) and the desire to stay physically and mentally active (49%).
Across all groups, the top aspiration for retirement is spending quality time with family and friends (35%), followed by escaping the daily grind of work and relaxing (22%) and global travel (18%). While health issues and physical decline (59%) remain the greatest concerns, these dreams inspire a more positive outlook on retirement./.