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MANILA, Philippines — Today, the Philippines is poised to receive economic dividends from the country's young population, a 115-year-old insurance company revealed in its latest study.
“Generations, particularly, Gen Z Filipinos… they do want to retire early,” InLife Chief Product and Innovation Officer Jose Eduardo Ang said at a recent press presentation in Peninsula Hotel, Makati City.
According to him, their study showed that Gen Zs want to retire in their 40s, 50s, and some, even at their 30s, which are “a lot earlier” than previous generations who aspire to retire at 60 or 70.
Their research found out that Gen Zs want to retire early due to:
- “First goal, a lot of them, 73%, wanted to nurture their relationships with loved ones during their retirement. They wanted to spend more time with family and friends,” Ang said.
- “The second thing found from the study with 65% wants to start or grow (their) own business,” he noted.
- “The third one is to be free from debt.”
- “Number 4 would be the continuance of a safe source of income so that they don't need to depend on the future generations. I think that's an inherent characteristic we see from the previous generation having experienced it themselves of the need to support parents, etc. They do want to make sure that it is something they don't need to pass down to their kids as a practice.”
- “And finally... to exercise or stay in shape more is another very popular goal coming in at about 40% of the survey’s respondents. Our respondents recognize the importance of staying active and healthy as they age and ideally prolong their lives.”
According to Ang, while their study shows that “Filipinos have high aspirations for retirement,” there is “a considerable gap between actions and goals.”
The following, he said, are considerations and stumbling blocks to expect when considering early retirement:
- Inflation: “They will always think that if I set aside of my P20,000 a month, my P25,000 a month, I'll be OK. But in fact, as the situation continues to rise, and you know, it being a regular part of all of our lives, the purchasing power through the retirement age will decrease, making it a lot more challenging for retirees to keep pace with the rising cost of living.”
- Medical expenses: According to Ang, while insurance premiums and social security could cover medication at 40s and 50s, these may not be enough when one reaches 60s to 70s and beyond. “Of course, the potential need for long-term care, hiring a nurse for your mom or your dad. Healthcare expenses are always a significant concern for readiness as they may face increased costs as age-related illnesses and health issues come up.”
- Unexpected emergencies: “A lot of people fear this and you know, it's not surprising, even as of today when a lot of these unpredictable situations come up… What are samples of these emergencies that will definitely affect people through retirement? Some of these examples, first off, would be unexpected costs for our health. Other concerns would be accidents, car repairs, home maintenance, medical emergencies, and natural disasters.”
- Tax integration: According to Ang, this is “something that is an integral and sad part of life that we have no escape from, and that's going to affect retirement income as well.” He reminded that even retirement savings “will also be subject to taxes unless you find a vehicle that is able to do without that… Imagine, (you’re going to pay) anywhere from 6, to 8, 10, 12%, depending on the year you're at when you retire. They will eat into your savings and into the disposable income… ideally that it's supposed to be part of your budget to address your needs and that does get eaten away as part of your living expenses.”
Ang affirmed that their company’s new study revealed that while the country has a young population, the country’s aging population is a “growth trend” that is “expected to continue,” emphasizing the need for a comprehensive approach to retirement planning as it will become a bigger and bigger concern for a larger segment of the population.
“Minsan sa dami ng ginagawa natin, we just get caught up in the present. We work hard, we support ourselves and our families pero hindi natin napapansin na ‘yung panahon natin para maghanda para sa sarili nating future ay slipping away,” singer and actress Sharon Cuneta pointed out in a statement.
She quoted a recent study on retirement commissioned by InLife, which says 80% of senior citizens in the country do not have adequate financial resources once they retire. The respondents surveyed in the research also said they would need a monthly retirement income between P25,000 to P50,000 to sustain the lifestyle they have gotten used to, but this may not fit the lifestyle retirees dream of enjoying. The disparity in funds needed vs available funds upon retirement may become larger due to unforeseen circumstances, often involving healthcare costs.
“In 2023, Filipino households spent over P600 billion out-of-pocket for healthcare. Dagdag pa natin dito ang projected inflation rate na 3% by 2029 - ito yung pagbaba ng value ng pera over time dahil tumataas ang cost of living. Lastly, ang mahirap pong i-predict is how much longer will we live. Kahit marami po tayong i-save, ang nakakatakot we will outlive our savings, lalo pa ngayon nag improve po talaga ang life expectancy dito sa Pilipinas. Mas humahaba ang buhay natin. This underlines the irony that while our lives continue to extend, there is so much to be done to financially prepare for those long retirement years.”
For her own retirement, Sharon is preparing her personal savings, emergency funds, and retirement benefits like InLife’s new Retire Assure plan, a two-in-one retirement and insurance program which the company said is “inflation-proof,” can be passed on to loved ones when one passes away, and does not require too much hassle like medical check-ups, which can lead many Filipinos to procrastinate and be intimidated to get an insurance and plan for their future.
According to Sharon, she has nothing against early retirement since she herself has been planning for it since she was 12.
“From the time pa na may parents were still alive and I was still a little girl, I would always hear na parang, ‘When you’re old na and you retire, your money should be working for you.’ You shouldn’t be working anymore because you have to. If you’re still working, you have to make sure that you’re working because you want to. It’s something that comes out of your passion, your interest, but not anymore to make a living. Parang it’s just going to give you something to do when you’re older.”
While she acknowledges the advantages of early retirement, like being able to enjoy doing activities while you are younger as opposed to when you are 60 or 70, she just does not think that stopping to work early is “smart” enough.
“Sa akin, it’s okay, ‘di ba, live your life the way you would? But mas nanghihinayang ako sa money-earning capabilities ng isang mas bata. So parang ang your best-earning years are while you are young. And at my age, you should really be doing things because you enjoy them and you should have been able to save enough to build on,” she pointed out.
“Your money that you’re saving, you don’t know how far it could go and ‘pag matanda ka na, you’ll regret na, parang I will outlive my money ah! Patay! Parang if your money runs out before you pass away, what will you do?”
Instead of early retirement, “Megastar” advised to build one’s livelihood around one’s passion, so work only feels like play.
“If you can, whatever you’re passionate about, why not find something there that you can turn into a business or a money-making enterprise? If you like surfing, for example, why not invest in a surfing school or just a little resort or Airbnb where you could enjoy your life, enjoy what you’re doing and at the same time, still be earning to cover the expenses of your hobbies and your passions? I think that’s just smart.”
Make sure, though, that if one is to turn passion into a profession, that it also is able to cover for one’s loved ones.
“Basta your basics are taken cared of, but it’s not only you. You must also think of your loved ones. You also want to make them libre every now and then. You also want to give your parents a great future, a great life, when they retire, or your brothers and sisters. Not everyone’s on the same boat. So habang may energy ka, habang bata ka, keep working. Even if life shows you retirement options, that’s fine, too, for as long as you keep moving,” she urged.
“No matter how young you are, no matter how small you invest, the power of compounding makes you finish with a high return… But you have to start as early as possible.” — Videos by Deni Bernardo
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