Retirement Survey Richard Jackson President Global Aging Institute - - PowerPoint PPT Presentation
From Challenge to Opportunity Wave 2 of the East Asia Retirement Survey Richard Jackson President Global Aging Institute PPI Winter Roundtable Los Angeles February 26, 2016 www. GlobalAgingInstitute.org Survey Framework The first wave of
Los Angeles February 26, 2016
The first wave of the East Asia Retirement Survey was conducted in 2011 in China, Hong Kong SAR, Malaysia, Singapore, South Korea, and Taiwan. The second wave was conducted in 2014 in the six first- wave countries plus Indonesia, the Philippines, Thailand, and Vietnam.
The survey universe consists of “main earners” aged 20 and over, including both current main earners and retired main earners.
Respondents were asked about their general attitudes toward retirement, as well as about their own retirement experience and expectations.
Current retirees were asked about their current retirement experience, while current workers were asked about their retirement expectations.
2
3
7% 9% 9% 10% 15% 17% 16% 19% 19% 22% 10% 17% 17% 23% 29% 33% 33% 38% 40% 41%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
2015 2040
Share of the Population Aged 60 & Over
UN Population Division
There are enormous differences in per capita income, institutional capacity, degree of market
population aging across the ten countries surveyed.
Yet all of the countries have in common large informal sectors and underdeveloped welfare states. In all of the countries, moreover, the extended family continues to play a far more important role in retirement security than it does in the West.
4
5
10% 6% 8% 10% 6% 11% 13% 11% 8% 10% 20% 21% 26% 29% 30% 32% 34% 48% 60% 63%
0% 10% 20% 30% 40% 50% 60% 70%
Income Personal Care
"Who, ideally, should be mostly responsible for providing income to retired people?” and "Who, ideally, should be mostly responsible for providing personal care to retired people?”
Share of Respondents Saying "Grown Children or Other Family Members"
6
9% 16% 17% 20% 25% 27% 29% 32% 37% 40% 6% 6% 6% 14% 12% 21% 12% 14% 16% 10%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Today's Retirees Today's Workers
Share of Today's Retirees Who Are and Share of Today's Workers Who Expect to Be Financially Dependent on Their Grown Children
7
68% 59% 45% 41% 31% 29% 27% 27% 27% 22%
0% 10% 20% 30% 40% 50% 60% 70% 80% Taiwan South Korea China Hong Kong Singapore Philippines Malaysia Thailand Indonesia Vietnam
Share of Respondents Agreeing that “Both parents and children are generally happier when they are more independent and self-sufficient.”
8
61% 48% 40% 44% 34% 18% 22% 9% 10% 18% 23% 30% 36% 41% 43% 45% 62% 63% 66% 66%
0% 10% 20% 30% 40% 50% 60% 70%
Retirees Themselves Government
"Who, ideally, should be mostly responsible for providing income to retired people?”
Share of Respondents Saying “Retirees Themselves, through Their Own Savings” versus Share Saying “Government”
9
10
26% 8% 5% 18% 2% 6% 7% 2% 4% 4% 14% 14% 15% 29% 33% 43% 45% 47% 61% 69%
0% 10% 20% 30% 40% 50% 60% 70% 80%
More Income A Lot Less Income
Share of Today's Retirees Who Have "More Income" Now Than When Working versus Share Who Have "a Lot Less Income"
11
60% 68% 61% 44% 55% 54% 79% 65% 55% 83% 45% 49% 59% 68% 68% 86% 89% 89% 91% 95%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Today's Retirees Today's Workers
Share of Today's Retirees Receiving and Share of Today's Workers Expecting to Receive Income from the State Pension System
12
3% 11% 13% 19% 41% 42% 42% 48% 50% 51% 8% 18% 18% 60% 63% 77% 68% 60% 73% 74%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Today's Retirees Today's Workers
Share of Today's Retirees Receiving Income and Share of Today's Workers Expecting to Receive Income from Financial Assets*
* Includes insurance and annuity policies and stocks, bonds, and mutual funds, but excludes bank deposits.
13
8% 28% 20% 14% 39% 32% 49% 29% 51% 34% 33% 50% 56% 60% 60% 65% 71% 71% 75% 76%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Today's Retirees Today's Workers*
Share of Today's Retirees Who Retired at Age 60 or Later and Share of Today's Workers Expecting to Retire at Age 60 or Later
* Includes workers who never intend to retire.
14
95% 90% 83% 81% 79% 68% 66% 64% 60% 50%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Vietnam Philippines Indonesia South Korea Thailand Malaysia Singapore Hong Kong Taiwan China
Share of Today's Workers Who Worry about Being "Poor and in Need of Money" during Retirement
15
3.5 2.8 2.7 2.7 1.9 1.4 1.1 .3 .2 .2
.0 1.0 2.0 3.0 4.0 South Korea Hong Kong Taiwan Singapore Malaysia China Vietnam Thailand Philippines Indonesia
Average Net Financial Asset-to-Income Ratio of Survey Respondents at Age 50*
* Includes all classes of household financial assets; ratios are averages for respondents aged 45-54.
Although pension receipt rates are rising in most countries, replacement rates are generally low.
In countries with pay-as-you- go state pension systems, workers are concerned about the security of government benefit promises.
Most workers are not saving enough for retirement on their own to make up for the likely gap in pension income.
16
68% 53% 46% 43% 41% 39% 32% 30% 27% 20% 12% 19% 27% 20% 31% 29% 43% 40% 51% 60%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Agree Disagree
Share of Respondents Agreeing and Disagreeing That "Supporting the Growing Number of Elderly Will Be a Large Burden for Tomorrow’s Workers and Taxpayers"
Note: The question used a five-point scale, with 1 being strongly disagree and 5 being strongly agree. "Agree" = 4 + 5 and "Disagree" = 1 + 2.
17
71% 65% 46% 45% 43% 40% 26% 24% 24% 15% 10% 15% 19% 26% 32% 32% 56% 51% 48% 68%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Agree Disagree
Share of Respondents Agreeing and Disagreeing That "Supporting the Growing Number of Elderly Will Be a Large Burden for Tomorrow’s Families"
Note: The question used a five-point scale, with 1 being strongly disagree and 5 being strongly agree. "Agree" = 4 + 5 and "Disagree" = 1 + 2.
18
19
Improve the adequacy of state pension systems
protection
Raise retirement ages and encourage longer work lives
55% 51% 41% 32% 32% 14% 11% 11% 9% 5%
0% 10% 20% 30% 40% 50% 60% Indonesia Vietnam Thailand Taiwan Philippines South Korea Malaysia Singapore Hong Kong China
Share of Today's Workers Who Do NOT Expect to Receive a State Pension Benefit
20
Improve the adequacy of state pension systems
protection
Raise retirement ages and encourage longer work lives
72% 52% 64% 77% 64% 30% 57% 54% 68% 68% 77% 82% 83% 85% 85% 88% 89% 90% 90% 90%
0% 20% 40% 60% 80% 100%
Contribute More Save More
Share of Respondents Saying “Require Workers to Contribute More to Pay for Government Pension Programs” versus Share Saying “Require Workers to Save More for Their Own Retirement”
21
Improve the adequacy of state pension systems
Raise retirement ages and encourage longer work lives
75% 74% 72% 69% 67% 61% 60% 43% 32% 27%
0% 10% 20% 30% 40% 50% 60% 70% 80%
South Korea China Taiwan Hong Kong Thailand Malaysia Singapore Philippines Indonesia Vietnam Share of Respondents Saying Government “Should Increase Taxes to Provide a Basic Pension Benefit to Those Elderly Who Are in Financial Need”
22
Improve the adequacy of state pension systems
protection
Raise retirement ages and encourage longer work lives
83% 68% 62% 60% 54% 53% 43% 40% 38% 23%
0% 20% 40% 60% 80% 100%
South Korea Hong Kong Indonesia Thailand Singapore Malaysia Vietnam Taiwan China Philippines Share of Respondents Saying Government Should Raise the Retirement Age
23
Educate the public about the role of the financial services industry in retirement planning
Help workers turn their retirement savings aspirations into retirement realities
Design financial products and services for workers who want to assume responsibility for their own retirement
Satisfy the demand for converting household savings and lump-sum pension payments into retirement income streams
63% 59% 50% 45% 43% 42% 41% 30% 29% 16% 8% 12% 29% 30% 19% 29% 27% 38% 32% 50%
0% 10% 20% 30% 40% 50% 60% 70%
Agree Disagree
Share of Respondents Agreeing and Disagreeing That "People Can Trust Financial Services Companies to Help Them Prepare for Retirement"
Note: This question used a five-point scale, with 1 being strongly disagree and 5 being strongly agree. "Agree" = 4 + 5 and "Disagree" = 1 + 2.
24
Educate the public about the role of the financial services industry in retirement planning
Help workers turn their retirement savings aspirations into retirement realities
Design financial products and services for workers who want to assume responsibility for their own retirement
Satisfy the demand for converting household savings and lump-sum pension payments into retirement income streams
80% 75% 69% 67% 63% 59% 53% 52% 31%
0% 20% 40% 60% 80% 100%
Singapore Taiwan Hong Kong Thailand South Korea Malaysia Indonesia Vietnam China
Share of Today's Workers Aged 20-39 Who Have Purchased Financial Assets as a Percent of All Workers Aged 20-39 Who Expect to Receive Income from Financial Assets* in Retirement
* Includes insurance and annuity policies and stocks, bonds, and mutual funds, but excludes bank deposits. Note:The Philippines is excluded from the chart because of insufficient data.
25
Educate the public about the role of the financial services industry in retirement planning.
Help workers turn their retirement savings aspirations into retirement realities
Design financial products and services for workers who want to assume responsibility for their own retirement
Satisfy the demand for converting household savings and lump-sum pension payments into retirement income streams
5% 25% 34% 11% 19% 9% 10% 18% 37% 25% 6% 21% 40% 26% 26% 39% 23% 35% 39% 54% 23% 26% 35% 40% 40% 45% 47% 53% 54% 65%
0% 10% 20% 30% 40% 50% 60% 70% Less than Secondary Secondary Postsecondary
“Have you ever received professional financial advice about how to invest your retirement savings?”
Share of Today's Workers Saying “Yes,” by Educational Attainment
26
Educate the public about the role of the financial services industry in retirement planning
Help workers turn their retirement savings aspirations into retirement realities
Design financial products and services for workers who want to assume responsibility for their own retirement
Satisfy the demand for converting household savings and lump-sum pension payments into retirement income streams
38% 44% 45% 45% 52% 53% 59% 62% 69% 78% 19% 25% 7% 14% 19% 18% 11% 19% 7% 7%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% All in Monthly Payments All in a Lump Sum
“If you could choose how pension benefits will be paid to you, please indicate which of the following ways you would prefer to receive the benefits.”
Share of Today's Workers Saying “All in Regular Monthly Payments” versus Share Saying “All in a Single Lump Sum”
27