Survey says Filipinos lacking in retirement planning

MANILA, Philippines - Most Filipinos do not have concrete plans for their retirement, a study by insurance firm Sun Life of Canada (Philippines), Inc. showed. Sun Life’s Study of Lifestyles, Attitudes and Relationships (SOLAR) found that out of 300 respondents between 25-45 years old, 60% did not even have a clear idea of when they would retire. Of the 40% with concrete retirement plans, only a little under two-thirds were in the habit of saving regularly for their twilight years. "A substantial number of Filipinos do not even know what to do when they retire," Sun Life President and CEO Henry Joseph M. Herrera said during the launch of a new investment-linked insurance product Wednesday. While 65 is the mandated retirement age, 21% of the respondents said they would keep on working after hitting this age, with 26% responding that they would stop. More than half said they would do part-time work to keep themselves busy or simply to maintain a steady source of income. The average amount required for retirement, the study said, was P19.3 million per person. This was derived from amounts the respondents said would enable them to live the ideal lifestyle they wanted for the rest of their life. The higher income segment, and those more conservative in investing, tended to have better-planned retirements, the study found. "We found out that Filipinos are concerned about their retirement but that they have very vague ideas on how to address their financial issues as they approach the golden years," Mr. Herrera said. Most Filipinos, he said, are "ultra conservative" investors who choose to park their funds in safe but low-yielding facilities such as savings accounts, time deposits, and money market instruments. "The tendency of Filipinos in a challenged economy is to withdraw their investments and hold on to their money," he added, "even when the age-old principle is to buy shares when the market is low." "Investors should stay in the market for long," he added, citing historical trends. — Gerard S. de la Peña, BusinessWorld