Boost personal savings for retirement, Pinoys told

By Leslie Gatpolintan

April 5, 2019, 9:06 pm

MANILA -- Filipinos are encouraged to start saving and investing now to prepare for their retirement plans.

Melissa Henson, senior vice president and chief marketing officer at Manulife Philippines, said they should set up a retirement financial plan “sooner”.

“How much money I am making? How much I am spending? How much I am saving? Of the amount that I am saving, where I am putting it and how quickly it is growing? Will it grow fast enough to give me enough for the years that I expect to live beyond my retirement or do I need to either save more or maybe diversify my investment plans so that I can put some money longer term and some instruments that will give me higher returns?,” she said in an interview on Friday.

Henson gave this advice following release of a survey indicating that Filipinos have the lowest personal income saved for retirement across key Asian markets, and majority of them are looking into continuing working after leaving their employment.

The 2018 Manulife Investor Sentiment Index (MISI) revealed that Filipino investors only have personal income equivalent to 3.6 months set aside for their retirement, lower than the average 2.9 years for other Asian investors.

Investors in Taiwan have the highest retirement savings, with personal income set aside good for 4.5 years. They are followed by investors in China and Indonesia who both have retirement savings that can last for 4.1 years.

The survey underscored the huge gap between Filipino investors’ current and ideal retirement savings.

They also believe that savings equivalent to 2.1 years’ worth of personal income is enough, remarkably low compared with the regional average of 12 years.

Henson said MISI results indicate that neighbor countries are “more active and more aware in terms of preparing for their retirement.”

“What we found in the surveys that we done over the years is that Filipinos are really more optimistic in terms of their attitude towards investment and finances,” she said.

“We are always happier about the results of our investments or the returns, we are always more optimistic even we are falling behind our savings goals, (thinking that) we can catch up. That optimism actually I think makes us maybe a little bit too confident that we can achieve the same goals within less time,” she explained.

The MISI further revealed that as much as 84 percent of Filipino investors are looking into continuing working after retirement, either on a full-time or part-time basis.

Top reasons for active retirement across age groups include keeping busy and occupied (66 percent), physical and mental health (65 percent), pursuing interests and enjoying life (63 percent), as well as financial considerations such as maintaining or improving living standards (59 percent), and saving additional money for the future (56 percent).

According to MISI, there is strong interest among those 50 years old and above to pursue digital work, either on a full-time or part-time basis.

More Filipinos participate in digital jobs compared to most parts of Asia, it added.

Freelance work and e-commerce top the list of prevalent digital jobs in the country, accounting for 71 percent and 55 percent, respectively, of full-time digital jobs.

MISI is a proprietary survey measuring and tracking investors’ views across eight markets in the region on their attitudes towards key asset classes and issues related to personal financial planning.

It is based on 4,011 online interviews in Hong Kong, China, Taiwan, Singapore, Malaysia, Thailand, the Philippines, and Indonesia.

Respondents are middle class to affluent investors aged 25 years and above who are the primary decision maker of financial matters in the household, and currently have investment products. (PNA)