People are saving or setting up financial plans for retirement earlier than five years ago due to increased crisis awareness, Taiwan Life Insurance Co (台灣人壽保險) said at a news conference in Taipei yesterday.
The average age that respondents to a survey said they would start saving was 37.87, compared with 43.29 five years ago.
That could be because the government’s labor insurance program faces bankruptcy by 2026 if no reform is undertaken, according to Minister Without Portfolio Lin Wan-i (林萬億), said Huang Hong-chih (黃泓智), a professor at National Chengchi University’s (NCCU) Department of Risk Management and Insurance.
People have become more doubtful about how much money they would receive if the government program fails, so they are tending to prepare for retirement earlier, Huang said.
Thirty-nine percent of respondents said that they intend to begin setting up retirement plans, such as savings or investment, in their 30s, the survey showed.
The results show that people believe they would need 20 years to prepare for retirement, with most workers eligible for government pensions when they turn 65, Huang said.
Respondents to a similar Taiwan Life survey in 2016 said that 15 years of preparation would be enough, the company said.
“I am glad to see young people willing to prepare financially for retirement, as the earlier they begin, the more they can take advantage of compound interest,” said Sharon Yang (楊曉文), an NCCU banking professor who helped analyze the survey results.
People are willing to set aside NT$15,086 per month to save or invest for retirement, up 73 percent from NT$8,685 a year earlier, this year’s survey showed.
Respondents who are in their 30s planned to save or invest NT$12,445 per month, while those in their 40s and 50s planned to set aside NT$14,964 and NT$19,164 respectively per month, the survey showed.
Stocks or bonds were named by 59.1 percent of respondents as their favorite financial tool, followed by time deposits and insurance policies, a surprising result, as its survey last year found that time deposits were most favored, Taiwan Life said.
“People becoming more proactive in investment might be because banks have been reducing interest rates for deposits since March amid a low-interest environment, while global stock markets have rebounded after plunging in March,” Yang said.
Taiwan Life advises people to put 6 percent of their salary into special retirement accounts and urges the government to reform the labor insurance system by giving people investment options to increase yields, company president Tony Chuang (莊中慶) said.
The survey was conducted from May to last month among Taiwanese aged at least 25 and collected 1,208 valid responses.
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