InLife highlights need for retirement planning amid growing challenges

Insular Life (InLife) recently released its research paper:Retire Without Worries: Your Roadmap to Living Life to the Fullest, shedding light on the urgent need for robust retirement planning in the Philippines.

The study highlights the increasing challenges faced by Filipino retirees amidst a growing population of senior citizens, soaring health care costs, and limited support for the elders.

The white paper delves into the retirement crisis in the country. In 2020, the elderly population, aged 60 and above, stood at 9.2 million. 

With the elderly population seen to grow by 7 percent by 2032, many struggle with financial insecurity, mounting prevalence of chronic diseases and disabilities, and cognitive decline, affecting the elderly’s quality of life and independence. In 2023 alone, households bore P633.3 Billion or 44.4 percent of the P1.44 Trillion in healthcare spending.

The “Retire Without Worries” study used a mixed-methods approach of onlineinterviews and quantitative research surveys for a holistic view of the retirement landscape. 

Six triads were formed based on demographic factors such as age and parental status: Generation X (those born between 1960 to 1980) with and without kids, Gen Y (those born between 1981 to 1996) with and without kids, Filipinos leading both frugal and indulgent lifestyles, including those belonging to the Sandwich Generation– Filipinos who have the double responsibility of caring for their growing family while taking care of their own parents and even extended family. 

These were complemented with quantitative data from 505 respondents nationwide.

These key respondents are increasingly concerned due to financial uncertainty despitecurrent relative financial stability. With Filipinos generally living long lives, there is fear of outliving one’s savings, inability to afford necessary healthcare costs, and the prospects of a diminished quality of life. This means Filipinos are aware of the need for long-term financial planning and retirement savings and insurance.

A key issue identified is the lack of financial literacy among Filipinos, with the country ranking among the bottom 30 after an assessment of 144 countries in the 2022 Standard and Poor’s Global Ratings. 

Among Filipinos adults, only 25 percent demonstrated adequate financial knowledge. Financial literacy encompasses knowledge of fundamental concepts such as interest rates, compound interest, inflation, and risk diversification, all of which are critical components of financial well-being.

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