MANILA, Philippines - Majority of Filipinos are strongly in favor of raising the official retirement age in the country, according to results from a survey published by Manulife, a Canadian insurance company and financial services provider.
Manulife's Investor Sentiment Index in Asia survey respondents expressed they want to continue to work beyond the age of 60 in order to support themselves as well as their families' needs.
Survey results showed 64% of Filipino survey respondents are strongly in favor of increasing the official retirement age.
The official retirement age in the country is 60 years old, which is below the Asian average, with most countries in the region setting retirement at 65 years.
Also, the company said that with life expectancy in the country significantly higher in recent decades, Filipinos have an increasingly lengthy retirement to save up for.
"People know that the social safety net is not going to cover all their needs when they retire and that they're going to have to fend for themselves," Manulife Philippines President and CEO Ryan Charland said.
"The gap can be made up by working in old age, but an alternative route is to invest as soon as there's some extra to put away and to do so consistently throughout your working life. That way, by the time retirement comes around, the compound returns from investments can provide a much-needed income top-up," Charland added.
The survey also highlighted the importance Filipinos place on providing financial security for their families.
The largest retirement concern of nearly 70% of survey respondents is their ability to leave an inheritance to children or heirs.
This is followed by fear that they will need to support their children financially, while a significant number of Filipino survey respondents also expect to support their spouse in retirement.
China disagree on raising the retirement age
The findings of the report showed that more than half of Asian surveyed region-wide said they agreed with raising the retirement age, while a quarter disagreed and the rest remained undecided.
Manulife said that survey respondents in Indonesia, Malaysia, and the Philippines were most in favor of such move.
Among the countries surveyed, only in China was there a clear majority, at 64%, who disagreed with an increase.
Manulife explained that the aversion of China survey respondents to an increase in the retirement age possibly reflects the confidence in the state to provide support. More than a fifth of their retirement income, higher than anywhere else in the region, is expected to come from the state pension.
"The survey suggests Asian survey respondents feel strongly that retirement ages have become outdated and should be raised," Manulife Asia President and CEO, Robert Cook, said.
"We've just seen the same sentiment in the Australian government's decision to lift their official retirement age to 70 from 65. That's a bold move, likely to be looked at closely by other governments in this region," Cook added.
Manulife said that Asians recognize that there's a need to work beyond the normal retirement age, in order to make ends meet and to enjoy a higher quality of life that comes with being actively engaged in the workplace and community.
The survey said that 60% of Asians expect to work either full- or part-time in retirement, with around 80% viewing it as a way to stay connected and healthy, as well as a source of income.
Those surveyed expect to work an average of 6 years beyond the official retirement age in their respective countries.
"A retirement age that was suitable in Asia 20 to 30 years ago is now likely to be obsolete. People can see that. They know too that they will need to work on after retiring, so they see merit in raising the retirement age to formalize the process," Cook said.
Manulife said that raising the retirement age is far from unprecedented in Asia.
In Singapore, the mandatory retirement age was raised to 62 from 60 in 1999, while Taiwan lifted it to 65 from 60 in 2008. Last year, Malaysia raised its retirement age to 60 from 55.
"Government in Asia have been under pressure to review their overall retirement schemes to adjust for changing demographic and retirement trends, whether that be raising the retirement age or helping to fund retirement," Manulife Financial in Asia Head of Wealth Management Donna Cotter, said.
"In turn, survey respondents are also becoming more aware they too need to make adjustments—and work longer to enhance their saving plans," she added.
Meanwhile, the second biggest concern among Filipino survey respondents is health deterioration, with 6 out of 10 worrying about their physical state.
The report also said that almost 9 out of 10 survey respondents expect private healthcare services to handle their medical needs during retirement, which runs counter to the rest of the region where the average is just one in 4.
However, only 40% of Filipino survey respondents have private medical insurance, and only 60% expect to purchase or maintain personal health insurance during retirement.
Despite such, only 15% are worried that healthcare will be unaffordable in retirement, which is less than half the regional average.
"Survey respondents think that healthcare will be somewhat affordable, but if they don't have insurance, it will be an out-of-pocket expense," Charland said.
"With medical expenses continuing to rise over time and at a greater rate than inflation, Philippine [survey respondents] would be wise to factor that into their retirement planning," Charland said.
The survey is based on 500 online interviews in each market of Hong Kong, China, Taiwan, Japan, and Singapore, while in Malaysia, Indonesia, and the Philippines, it is conducted face-to-face.
Respondents are middle-class to affluent investors, aged 25 and above, who are the primary decision makers on financial matters in the household and currently have investment products. – Rappler.com