Insurance firm Insular Life (InLife) yesterday shed light on the urgent need for robust retirement planning in the Philippines, as its study revealed that only 30 percent of those surveyed feel confident about their financial preparedness for retirement.
InLife’s research paper titled, “Retire Without Worries: Your Roadmap to Living Life to the Fullest,” highlights the increasing challenges faced by Filipino retirees amidst a growing population of senior citizens, soaring healthcare costs, and limited support for the elders.
The report showed the results of the company’s survey from 505 respondents nationwide with various profiles, and it revealed that more than half or 53 percent expressed worry about having insufficient funds to sustain their desired lifestyle in retirement.
Filipinos independently estimate that they require an average monthly income of P25,000 to P50,000 to sustain their current lifestyle post-retirement, the report said.
“However, considering projected inflation rates of three percent for 2029 alone, and the potential for unforeseen expenses, these estimates may prove insufficient,” it said.
The report also highlighted that the rising costs of healthcare, housing, and essential goods have eroded purchasing power, making it challenging to save for retirement.
A significant majority or 72 percent of respondents expressed concern about healthcare costs.
In 2023 alone, households bore P633.3 billion or 44.4 percent of the P1.44 trillion in healthcare spending.
The paper further showed that 52 percent of those surveyed are aiming for financial independence to avoid depending on their own children, with a significant portion of respondents (33 percent) aiming to retire between the ages of 56 and 60.
However, the report revealed a considerable gap exists between aspirations and actions.
Only 50 percent of respondents are actively taking steps to prepare for retirement.
Those who do not save for retirement said procrastination, mistrust in financial institutions, over-reliance on current financial situation, and other cultural factors such as strong familial ties and intergenerational support keep them from actively saving for retirement.
The research also noted heavy dependence on retirement benefits offered by employers, or government pensions which may not be enough considering employees typically need to work for the same employer for at least ten years and be at least fifty years old to qualify, the company said.
Moreover, Filipinos prioritize immediate needs such as housing, healthcare and other short-term financial needs over long term health and financial security planning, leading to poor health outcomes with Filipinos usually forgoing preventive care and costly medical treatments.
The report said that in 2020, the elderly population, aged 60 and above, stood at 9.2 million, and this number is seen to grow by 7 percent by 2032.
“A good retirement product must have the following features: guaranteed and steady income, protection from inflation, death benefits providing financial support to loved ones in case of one’s death, and a disciplined approach to savings for a future financial need,” said InLife Senior Vice President and Chief Product and Innovation Officer Jose Eduardo O. Ang.
“As we face an evolving retirement landscape, it is important that we empower Filipinos with the proper financial education and a solution that can ensure a worry-free retirement. Retirement planning does not have to be a daunting exercise. InLife’s website has a retirement calculator that anyone may access, and of course, seasoned financial advisers to help them start planning for a worry-free retirement,” he added.