The survey, called ‘Retirement Attitudes and Financial Strategies of the Affluent 50+ Generation in Asia’ surveyed people aged 50 and over from Hong Kong, Singapore, Taiwan and South Korea who represent the top 20% in terms of investable assets.
Two other chief concerns were the fear of outliving their assets, highlighted by 35% of those surveyed and the fear of the impact of poorly performing capital markets (31%).
These concerns are reflected in the choice of investment products that individuals consider suitable for retirement. Real estate, which is often regarded as being less affected by inflation, tops the list with 56% of mentions.
Their preference for real estate is mirrored in another result of the survey, that 97% own real estate for their personal use and around 20% for investment purposes. Other financial products considered suitable for retirement planning are deposit accounts (48%), life insurance (41%), fixed annuities and precious metals (31 and 30% respectively). Lifecycle and lifestyle funds rank far behind with 14% each.
Brigitte Miksa, head of international pensions at Allianz, said: “People in Hong Kong, Singapore, South Korea and Taiwan save much more for precautionary reasons than individuals for instance in the US. This may be due to more financial uncertainty about their future or linked to a need to plan for unexpected medical expenses.
She said Allianz’s recent study on the US retirement market revealed a different perception of risk: “In the US, due to the financial crisis and the relatively high share of equities in individual retirement accounts, private investors perceive capital markets as the main source of risk for their retirement.
The comparison between the US and Asia also shows different patterns of decision making. In the US, 17% rely on an independent financial adviser for retirement planning whilst in Asia the figure was only about 3%, Miksa stated.
Andreas Hilka, head of pensions at Allianz Global Investors said: “In a mature market such as the US, people rely more on advice than in less mature markets. With ongoing volatility in capital markets, the question of how advisers can earn and maintain the trust of their clients becomes a vital issue. It is interesting therefore that private investors in the US, a mature market, are overall more satisfied with retirement planning than Asian investors.”
The two surveys combined revealed that people in the US feel most satisfied with their retirement planning, followed by Singapore, Hong Kong and Taiwan. Individuals in South Korea were substantially more dissatisfied with their retirement planning with 79% believing that they had made mistakes in their retirement planning.
The report can be viewed and downloaded here: http://retirement.allianzam.com/Pages/market-trends-and-surveys.aspx
