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 Filipino retirees face, including a growing population of senior citizens, soaring healthcare costs, and limited support for the elderly.
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% 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% of the P1.44 Trillion in healthcare spending.
Understanding the challenges of retirement
The “Retire Without Worries” study used a mixed-methods approach, including online interviews and quantitative research surveys, to provide 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 and 1980) with and without kids, Gen Y (those born between 1981 and 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 about financial uncertainty despite relative economic 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 know the need for long-term financial planning, 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 assessing 144 countries in the 2022 Standard and Poor’s Global Ratings. Among Filipino adults, only 25% demonstrated adequate financial knowledge. Financial literacy encompasses knowledge of fundamental concepts such as interest rates, compound interest, inflation, and risk diversification, which are critical components of financial well-being.
Retirement realities and aspirations
Only 30% of those surveyed feel confident about their future retirement. Still, 52% aim for financial independence to avoid depending on their own children. They desire to break free from the generational cycle of dependence and be financially independent in their old age. In the Philippines, there is cultural reliance on family, with many relying heavily on familial support to see them through retirement.
The research also noted heavy dependence on retirement benefits offered by employers or government pensions, which may not be enough considering employees typically need to work for the same employer for at least ten years and be at least fifty years old to qualify.
Moreover, Filipinos prioritize immediate needs such as housing, healthcare, and other short-term financial needs over long-term health and financial security planning, leading to poor health outcomes. Filipinos usually forgo preventive care and costly medical treatments. Of those surveyed, only 50% actively save for retirement.
Those who do not, say procrastination, mistrust in financial institutions, over-reliance on current financial situation, and other cultural factors such as strong familial ties and intergenerational support keep them from actively saving for retirement.
However, when asked, 33% of respondents want to retire between the ages of 56 and 60, while 22% are mostly Gen Zs who dream
of retiring between the ages of 46 and 50. An average monthly income of P25,000 to P50,000 could sustain their current lifestyle into retirement. With a projected inflation rate of 3% in 2029 and the potential for other unforeseen expenses, this may not be enough.
Despite these gaps, Filipinos, who are generally optimistic, aspire to spend quality time with their families, start a business, and achieve financial freedom when they retire from active employment.
InLife’s solution: InLife retires assure
InLife offers a solution to fill the gap in retirement planning.
“A good retirement product must have the following features: guaranteed and steady income, protection from inflation, death benefits providing financial support to loved ones in case of one’s death, and a disciplined approach to savings for a future financial need, which is what the InLife Retire Assure offers. Retire Assure, a first for retirement solutions in the country, takes the guesswork out of retirement planning,” said InLife Sr. Vice President and Chief Product and Innovation Officer Jose Eduardo O. Ang.
InLife Retire Assure provides guaranteed monthly income from age 60 or 65 until 100 years. It provides a simplified and disciplined structure for setting aside premiums, so they accumulate over time. Once the policyholder retires at age 60 or 65, the insured is still alive, and the policy is in force, InLife Retire Assure will provide guaranteed monthly cash payouts to the policyholder.
These payouts are further enhanced by cash dividends that have the potential to increase over their retirement years to keep up with inflation and increases in living expenses.
It offers flexible premium payments and payouts and is payable in five-, ten years, or up to age 59 or 64, depending on one’s preference. One may opt for annual, semi-annual, quarterly, or monthly premium payments. When the plan is due for payouts, they may be made through a peso bank account chosen by the policyholder.
InLife Retire Assure also has a life insurance component, which will be given to the insured’s beneficiaries if the insured passes away before the age of 100. There is also a hassle-free application with a guaranteed issue offer. This means anyone who applies for an InLife Retire Assure plan does not need to undergo medical evaluation, regardless of one’s health condition, to be eligible for coverage.
“As we face an evolving retirement landscape, it is important that we empower Filipinos with the proper financial education and a solution that can ensure a worry-free retirement. Retirement planning does not have to be a daunting exercise. InLife’s website has a retirement calculator that anyone may access, and of course, seasoned financial advisers to help them start planning for a worry-free retirement,” said Ang.
The research paper “Retire Without Worries: Your Roadmap to Living Life to the Fullest” was presented to stakeholders and media representatives during a luncheon at The Conservatory of the Peninsula Manila. During the event, InLife executives and stakeholders are committed to advancing retirement preparedness in the country and empowering every Filipino to live life to the fullest and retire without worries.