Asians looks on the bright side in retirement
Louisa Cheang says they expect to stop working earlier and leave a legacy
The tectonic shifts under way in the global economy, demography and society are rewriting the future of billions of men and women in Asia. For most, that future is bright, but there is a danger that optimism is displacing proper planning for retirement.
HSBC's Future of Retirement survey provides a snapshot of how these huge shifts are playing out in real time. The overwhelming impression is of a continent brimming with optimism: in contrast to Europeans, Asians believe that tomorrow will be better than today.
Asians across the spectrum believe they are better off than their parents. In every Asian country surveyed, people expected to retire earlier than their parents, typically in their late 50s. The difference in outlook between the East and the West is stark. Australians expect to retire at 64 and Britons at 65, three and four years later, respectively, than their parents' generation.
In contrast to Europeans, Asians believe that tomorrow will be better than today
Asia's rising middle class is also accumulating capital, and they are using their new affluence to upend traditions. Whereas children were once expected to support their aged parents, most of the new generation of retirees are looking forward not only to maintaining their pre-retirement style of living, but also having enough left over to leave a substantial legacy to their children.
The new Asians are redefining the meaning of retirement, increasingly opting to remain in some kind of paid employment. For a minority it is a financial necessity, but for many more it is a lifestyle choice. When these "semi-retirees" were asked why they continued to work, the answers were uniform across the region: they wanted to keep active; to ease their transition into full retirement; and they enjoyed their work.
But there are short-term pressures. People are living longer, and children are taking longer to become self-sustaining. Globally, the 65-and-older population is expected to triple by 2050, when it will make up 20 per cent of the population.
The impact of extra longevity is already being felt. In Hong Kong, for example, 44 per cent of current retirees are already funding their parents, and 58 per cent of future retirees expect to be doing so. The situation in India and China is particularly acute: 52 per cent and 40 per cent of retirees are still supporting their children, respectively.