Japan, Singapore, Australia, New Zealand and South Korea were the Asia-Pacific countries that ranked in the top 30 destinations for retirees.
The 2015 Global Retirement Index by Natixis Global Asset Management revealed Japan and Singapore as among destinations that showed much improvement in terms of retirement security. Natixis analyzed 150 countries.
The findings overall suggest that retirement security is uncertain for most retirees, given unsustainable demand for government resources and macroeconomic factors that affect the value of retiree savings, placing more responsibility on individual investors for their own welfare in retirement.
Madeline Ho, head of Wholesale Fund Distribution, Asia Pacific, Natixis Global Asset Management, said, “The global trend remains the same. Individuals will be asked to do more to provide for themselves in retirement. We need to help investors recognize that reality and help them do as much as possible to ensure their own retirement security.”
Japan retook its place in the top 20, rising from 27th to 17th due to a continued top global ranking for healthcare with world-leading life expectancy increasing to 83.1 years, increases in health expenditure per capita, insurance expense coverage, and the highest number of hospital beds per capita in the world. Japanese retirees’ financial security also increased due to strengthened bank balance sheets, improved governance, and comparative improvements in interest rates.
Singapore climbed 11 places from 41st to 30th in the rankings to enter the top 30, due to improvements in material well-being and quality of life. Singapore has the world’s third highest income per capita (rising from US$61,100 to US$76, 850 last year) and a low unemployment rate (2.8% in 2014), both contributing to the country’s rise in the rankings. Environmental improvements drove a rise in the quality of life index and the finances in retirement index rose as a result of renewed growth, a strong financial sector, lower inflation and higher real interest rates.
Australia and New Zealand are the only two Asia Pacific countries in the top ten of the 2015 Global Retirement Index.
“Japan, Singapore, Australia and New Zealand stand out amongst other Asia Pacific countries as providing better retirement security, as they share well-developed and stable economies, with strong financial systems and regulations, public policies that provide broad access to healthcare and other social services as well as substantial public investment,” says Ho.
Besides Japan and Singapore, Qatar and Kuwait were the other two biggest risers: Qatar moved from 31st to 21st place and Kuwait moved from 40th to 26th. The two countries enjoy the world’s first and second highest incomes per capita and their unemployment rates are under 1.5%.
However, the United Kingdom fell out of the top 20 (from 18th to 22nd) and Spain dropped 26 places from 29th to 55th, behind the likes of Thailand, Mauritius and Peru. Greece slipped 37 spots from 39th to 76th, lagging behind Vietnam, Colombia, and the Ukraine.
Most investors need help to achieve retirement security. Another worldwide survey by Natixis found that 68% of investors do not have a financial plan and only 16% say they have a clear idea of the annual income they’ll need to maintain their standard of living in retirement. Individuals should focus on factors within their control, such as financial planning, setting goals and being more engaged with their finances.
