Most Asian women not ready for 'comfortable retirement' – survey

MANILA, Philippines – Women’s retirement pots are affected by diminishing saving power and more immediate life obligations, according to The Hongkong and Shanghai Banking Corporation Limited’s (HSBC) survey entitled "Future of Retirement: A balancing act."

The survey covering 16,000 people in 15 markets worldwide (Australia, Brazil, Canada, France, Hong Kong, India, Indonesia, Malaysia, Mexico, Singapore, Taiwan, Turkey, United Arab Emirates, United Kingdom, and United States of America), revealed that 3 in 10 or 35% women in Asia are not preparing adequately for a comfortable retirement.

The problem is acute in Taiwan and Hong Kong, with those not preparing 64% and 44% respectively, the survey revealed.

Women, with an average life expectancy of 72.7 years, live 4.5 years longer than men, thus the need for them to save for a comfortable retirement. However, the survey found that 33% of Asian women are not saving specifically for retirement.

Specifically, almost half (45%) of Asian women said they are not preparing adequately for a comfortable retirement because they are paying off their mortgage and other debts.

A total of 35% of Asian women said they did not start early enough while 34% were not aware of how much to save.

Almost three-quarters (73%) of women in Asia are already concerned that they will not have enough money to live day-to-day upon retirement compared to 65% of men.

More Asian women than men (42% versus 36%) also said their cost of living is increasing faster than their income, compared with a year ago. The numbers peak to 64% in Singapore, followed by 57% in Australia, and 49% in Malaysia.

Nearly one in 5 (23%) of Asian women stopped or reduced the amount they put into investments following the economic downturn, compared to 20% of men.

Four in 5 (80%) Asian women fear cost of health care in retirement compared to 75% of men.

The survey also found that Asian women have higher confidence in cash deposits. More women than men (74% versus 72%) said cash deposits are a good way to generate income for retirement.

In comparison, more Asian men than women (63% versus 60%) see investments as good ways to generate income for later life.

Globally, workers are expected to face a 7-year savings gap, in which for an average 18-year retirement, workers worldwide expect to run out of their retirement savings and investments (excluding pensions) after only 11 years.

Start early

Women should start planning for their retirement as soon as they have a regular income for a better financial future, the survey suggested. (READ: 5 key money lessons I learned from my mom)

Female life expectancy is expected to continue to rise with enhanced lifestyles and advances in medicine. To ensure women are not left vulnerable in later life, they should start planning for their retirement as soon as they have a regular income,” said Vineet Vohra, HSBC global head of wealth insights.

“Start saving early and do so regularly. This way you are far more likely to achieve your financial goal and recover from losses that may occur along the way,” Vohra added.

With more working women financially supporting themselves and their children’s education nowadays, there is a growing need for them to put some protection plans in place so that their retirement plan and other key wealth needs will not be impacted by any unexpected event.

“It is important to have a proper financial review with a trusted wealth adviser to assess how much you need to cover living costs and health protection in later life,” Vohra said.

It is also important to make sure there is an appropriate mix of growth and income assets in their portfolio, based on one's risk profile.

The HSBC Future of Retirement survey showed that people, particularly women, tend to have a strong preference for holding cash. However, they may not realize that the purchasing power of cash is likely to be eroded by inflation over the long-term.

Investing the cash into either growth or income-oriented assets that are appropriately matched to the individual's risk appetite and objectives should help grow or preserve the real value of their assets over time, the survey said. – Rappler.com