In Asia, personal savings have often been reserved for immediate or short-term needs, such as having children or planning a wedding. Saving for the long-term, and specifically, for retirement, was rarely thought of — particularly in societies with extended family structures, which have been long looked to as the primary source of support in one’s old age.
But attitudes and expectations toward retirement are changing as Asia undergoes a cultural shift. Traditional family support networks are weakening, driven by shrinking family size, plummeting birth rates and a widening age gap between the young and old. This places a greater emphasis on individual retirement planning, which is now becoming more of a priority to Asia’s employees. In fact, according to our recent Global Benefits Attitudes Survey – Asia Pacific, three in five employees say retirement security is now more of a priority than it’s been in the past.
While this is a good sign, employees also said they’re worried about their current and financial future, with one-in-five saying the stress is negatively affecting their lives. One-third of employees said they’re concerned they won’t be able to pay for care once they’ve left the workforce. Roughly the same percentage worry they’ll run out of money if they live longer than expected. It’s understandable that more than half said they expect to delay retirement.
The good news is employers can help allay some of the financial anxieties and help their employees get on track toward a more secure retirement.
So what can employers do?
Our research has found that employees who have more generous retirement plans have fewer worries about their future. They’re less likely to be anxious, and more likely to be confident in having sufficient resources to see them 15 or even 25 years into retirement.
So the first step is asking whether employees are aware of the resources at their disposal. Do they understand how much they are spending currently and how much they need to be contributing to retirement in order to maintain their income levels?
Our research found that almost 40% of employees would take advantage of spending tools to track spending or saving, assess their finances and set financial goals. Approximately a third would welcome personalized communications with advice on how to improve their finances. And 30% would prefer an online portal/mobile app to access financial information.
Consider these steps to guide employees toward a secure retirement:
- Build a solid communications strategy that reaches employees in diverse and relevant ways, clearly outlining your contribution to their retirement, and how much they should contribute on their own.
- Consider financial tools that can help employees better understand their finances. Take advantage of online apps, video and platforms that can simplify information employees may find confusing or intimidating.
- Offer a range of plan designs that cater to employees in different stages of their lives; those closer to retirement may want the ability to make higher contributions than younger colleagues.
While employers may have concerns about intruding into the private lives of employees when it comes to financial issues, our research found that employees would welcome the help. Almost two-thirds of employees think that employers have a role in actively encouraging them to live healthy lifestyles, and 51% think they should play a part in helping them save for retirement. The key for employers is to inform, educate and encourage from a place of authenticity and genuine care for their employees’ financial wellbeing.
Jeff Howatt is the Head of Retirement – Asia Pacific, at Willis Towers Watson.