In Việt Nam, younger generations are embracing a proactive approach to retirement, choosing to retire later and save more. — Photo courtesy of Sun Life Vietnam

HCM CITY — As Asia Pacific faces a significant demographic shift, with nearly one in four being over the age of 60 by 2050, new research by Sun Life Asia reveals challenges and opportunities for retirement planning across the region.

The research, 'Retirement Reimagined: facing the future with confidence', surveyed 510 respondents in Việt Nam as part of a survey of over 3,500 people across countries including China, Indonesia, Malaysia, the Philippines, Singapore and Việt Nam. The report aims to understand their aspirations and planning practices as they prepare for old age.

Research in Việt Nam 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.

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 per cent will leave planning around retirement expenses until five years or less before retirement and 7 per cent will not plan for this at all.

While most respondents save at least 10 per cent of their income for retirement, an alarming 23 per cent do not. When asked about planned sources of income in retirement, the average expectation was for 25 per cent 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 per cent admit they had not planned their retirement expenses, leading to 20 per cent 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 per cent) and healthcare expenses (51 per cent). In response, many have been forced to cut spending (73 per cent) and return to the workforce (33 per cent).

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 per cent), the need to save more (61 per cent) and the desire to stay physically and mentally active (49 per cent).

Across all groups, the top aspiration for retirement is spending quality time with family and friends (35 per cent), followed by escaping the daily grind of work and relaxing (22 per cent) and global travel (18 per cent). While health issues and physical decline (59 per cent) remain the greatest concerns, these dreams inspire a more positive outlook on retirement. — VNS