Retirement Planning, Pinoy-Style

By Randell Tiongson

Ever wondered how Filipinos view retirement planning? We conducted a short survey with 100 respondents answering 10 questions: 1) Age, Sex 2) Profession 3) Annual Income 4) Desired Retirement Age 5) Do you have a structured retirement program in place? If so, what kind? If not, why not? 6) Do you think you will have enough money to live your retirement age comfortably? 7) In your opinion, when is the best time to start planning for retirement? 8) In your opinion, what is the best investment for retirement? 9) In your opinion, why do you think Filipinos are not too interested in retirement planning? 10) Do you think it is a good idea to talk to a professional to help you with retirement planning?

The ages ranged from 21 to about 50 but the average age was between 30 and 35. Interestingly, there were more males who responded than females. Average income was also diverse, from minimum wage earners up to millionaires.

For the other questions, the answers were very similar. Most of the respondents prefer to retire earlier that the usual 60 or 65 years old. Average target retirement age was about 50 years old. It seems many do not see themselves working very long and would like to get out of the rat race earlier than most. Here’s a disturbing revelation: while majority wanted to retire early, many of them do not have any retirement program in place. It makes you wonder how serious they are in wanting to retire early – it might just by wishful thinking for most of them.

For question 6, most agree that they may not have enough money to retire comfortably. As for when’s the best time to start planning, they were unanimous in stating “the earlier, the better” principle applies – from the time one earns income or at least when one hits 30 years old.

For the best investment for retirement, the top three answers were real estate, time deposits, and savings. There were very few respondents who made mention about more sophisticated instruments like life insurance, mutual funds, unit investment trust funds, stocks, bonds, or structured notes. Ironically, quite a number of respondents came from the financial services industry. If our respondents are an indication of the average middle class Filipino, you can surmise that we remain to be largely unsophisticated when it comes to investments. It is no wonder our capital markets are still highly undeveloped with most of the funds invested in short term savings and time deposits.

When asked why they think Filipinos do not take retirement planning seriously, respondents talked about immediate gratification, mañana habit, lack of funds, low income, increasing expenses, wrong priorities, short-term thinking, lack of knowledge, etc. Here’s an interesting explanation from respondent: “Filipinos are not too keen on preparing for their retirement maybe because of what we call the extended family. Further, most parents are too busy preparing for their children’s future and they tend to forget to prepare for their old age. They will simple say, if I can provide a good future for my children they will look after me during my old age.” This has been referred by some as Filipino retirement planning, and this mentality is something that needs to be reconsidered.

With regard to consulting with a professional, nearly all respondents thought it was a good idea. At least they acknowledge they will need help in this important area. This survey is a good reminder for all of us to take retirement planning more seriously.

The Bible actually talks about preparing for the future – many refer to it as the Storehouse Principle. Come to think of it, retirement planning is just like filling our storehouses. Let us be consistent in filling up our storehouses so that when the time comes, we will have enough supply for our needs. Retirement planning is no different – we must be faithful in allocating for our retirement so the when we do retire, we will have more than enough. Just as God blesses the storehouses in the biblical times, God will bless our financial plans as well. Remember though, if one does not have a storehouse (or a retirement program in this case), what will God bless then?