A recent survey by Sun Life has revealed that more than a fifth of retirees in the Asia-Pacific (APAC) region are struggling with unforeseen expenses in retirement. Despite saving for retirement being a top financial priority for various age groups, 59% of respondents indicated they would postpone retirement planning until five years or less before retirement. Alarmingly, 14% admitted to having no plans to prepare financially at all.
This lack of foresight is contributing to significant financial strain among retirees, with 26% reporting they had not anticipated their retirement expenses. Additionally, 20% were surprised by higher-than-expected costs, especially concerning living and healthcare expenses.
The survey, titled Retirement Reimagined: Facing the Future with Confidence, collected insights from over 3,500 respondents across China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, and Vietnam. It highlighted that while retirement planning is becoming increasingly important, many individuals remain ill-equipped to meet the financial demands of their later years.
One notable finding from the study is the reliance on cash savings as a primary source of retirement income, with 25% of participants expecting to withdraw from these funds. This strategy may hinder their ability to maximize retirement income, as many are not leveraging investments to offset inflation. Furthermore, 19% of working-age respondents do not contribute to any pension plans, leaving them vulnerable in their retirement years.
Current retirees face significant challenges, with 26% admitting to inadequate planning for their expenses. This has resulted in 20% experiencing unexpected financial burdens, particularly in healthcare and daily living costs. Health concerns weigh heavily on many respondents, with 59% expressing anxiety about physical decline in their later years, potentially jeopardizing their hopes for a peaceful retirement filled with family time and travel.
Consequently, many retirees have had to reduce spending or liquidate investments. The survey also indicated that 23% of retirees regret their financial decisions, with 66% wishing they had saved more and 52% wishing they had invested more wisely.
The study categorized respondents into two distinct groups: “Gold Star Planners,” who carefully prepare for retirement, and “Retirement Rebels,” who exhibit minimal or no financial preparation. Gold Star Planners, who save more than 10% of their income and have insurance and pension products in place, are more likely to manage their retirement expenses effectively and experience fewer regrets.
As Asia faces an ageing population—projected to have one in four individuals over the age of 60 by 2050—the findings highlight the urgent need for comprehensive retirement planning strategies. This includes early saving and investing, as well as seeking advice from financial professionals to ensure that retirement income aligns with inflation and rising healthcare costs.
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