The report finds that households in these countries and territories have relatively high levels of accumulated wealth, and suggests that more efficiently mobilising these assets could significantly supplement other sources of retirement income.
The report, entitled Asset rich, income poor? Key components of retirement income security for aging Asia, is the third in Manulife Asset Management’s Aging Asia series and builds on the findings of its November 2012 publication, Funding the golden years: The financial and economic factors shaping retirement provision for Asia’s rapidly aging populations.
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The previous publication analysed the complex interplay of wealth, pension regimes, demographics and macroeconomic trends that influence the provision of retirement funding in the region, concluding that individual households are likely to have to shoulder an increasing portion of the financial responsibility for generating retirement income.
With this is mind, the newest report examines five Asian economies – Hong Kong, Japan, Singapore, South Korea and Taiwan - that are in the advanced stages of their demographic dividends and have accumulated considerable levels of household wealth. While these levels of wealth suggest that constituent households should be able to retire with a high degree of income security, evidence indicates that many are actually entering retirement asset rich, but income poor.
The research reveals that this situation arises from challenges associated with each of five key components of retirement income security: salary and wages; government social spending; pension benefits; familial support; and income arising from household wealth.
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