ASEAN Ill-Prepared for Old Age

The demographic dividend that helped drive ASEAN’s strong economic growth from at least the 1990s is coming to an end. Some countries are further down this path than others.

While Indonesia and the Philippines can continue to rely on their relatively young workforces, Thailand and Vietnam are already getting older, and Malaysia is beginning its transition to an aging society, Nikkei reported.

Many of the region’s workers are financially ill-prepared for retirement, however, while rising rates of dependency will have a profound impact on national economies.

A regional survey by Financial Times Confidential Research of 5,000 urban residents aged 18 and over found workers have done little to prepare for retirement. A large proportion of respondents across the five largest developing ASEAN economies said they were not confident or were unsure that they could live comfortably in their retirement years.

Most working urban respondents aged 18-50 said they would have to continue working beyond retirement age. Despite living in the most prosperous economy among the ASEAN-5, Malaysians were the most likely to believe this, with 65.1% saying they would need to keep working.

“Such fears are already a reality for many retirees. We found that a large portion of retired respondents are still doing some work to support themselves. Even in Malaysia, where the proportion of working retirees was the smallest, elderly men and women working as custodians is a common sight in Kuala Lumpur,” the survey said.

“Our survey found that in some countries as many as half of respondents claimed they did not have access to a pension or provident fund. They also reported limited savings. Among Malaysians with no access to pensions or provident funds, 31.7% had savings of just Rm100 ($24) or less. Among Thais without retirement support, 34.8% had savings of Bt1,000 ($31) or less.

“Even those with access to a pension or other funds are not necessarily ready for retirement.”