Taiwanese need about NT$15m to have a comfortable lifestyle in retirement

• By Crystal Hsu / Staff reporter

Taiwanese need about NT$15 million (US$466,200) to maintain a comfortable lifestyle in retirement, but nearly 80 percent said they lack the finances to meet that target, a survey released on Tuesday by CTBC Bank (中國信託銀行) showed.

Retirement planning has rapidly grown in importance as Taiwan is set to become a “super-aged society” next year when people aged 65 and older account for 20 percent of the population, CTBC retail banking chief Yang Shui-hui (楊淑惠) said.

The issue must not be taken lightly with life expectancy in Taiwan increasing with medical and technology breakthroughs, she said.

Taiwan’s current life expectancy is 81.21 years, suggesting a 0.21 percent increase from last year, according to government data, which showed a similar rate of growth in the past three years.

Most respondents said they would need an estimated NT$14.27 million to maintain a decent lifestyle after retirement, while 20 percent said they needed NT$25 million, the survey showed.

Eighty-seven percent of the respondents said they use investment tools to manage their wealth, while more than 50 percent reported investment returns of more than 5 percent in the past three years, it said.

Still, 53 percent describe market movements as “evasive” and are worried about their long-term investments, it said.

Stocks were cited as the most popular investment tool among respondents, accounting for 66.9 percent, followed by fixed-term deposits at 62.9 percent and exchange-traded funds (ETFs) at 41.9 percent, it said.

ETFs have overtaken savings-related insurance policies as the third-favorite investment vehicle, with 55 percent of respondents saying they preferred investment products that promise regular and stable cash flows.

That helped account for the surge in scale of local ETFs that feature monthly or quarterly distributions of cash dividends, CTBC Bank said, adding that a growing number of Taiwanese are counting on passive income from ETFs to sustain their lifestyle after retirement.

Nevertheless, 34.9 percent said they do not have a designated retirement account, while 34.8 percent said they worry that no one would take care of their children or sick family members after their death, and 16.1 percent said they worry about a lack of knowledge about whom and how to pass on their wealth, the survey showed.

As for what they want in retirement, good health is considered the most valuable at 81 percent, followed by traveling the world at 55 percent, and developing hobbies and habits at 23 percent, it said.

CTBC Bank conducted the poll from July 26 to Aug. 15 with 1,200 people older than 30.