Residential Pension Wealth Management Report: How to Live an Ideal Retirement Life
Economic Observer Network reporter Hu QunOn November 3, Fidelity Fund, China CITIC Bank and China Asset Management released the 2023 “Chinese Resident Pension Wealth Management Development Report” (hereinafter referred to as the “Report”). It shows that this year’s respondents believe that they need to save an average of 235.6 before retirement. It takes 10,000 yuan to meet the pension needs after retirement, and the average figure in 2022 is 2.812 million yuan.
The “Report” shows that based on the results of this survey, the average monthly pension savings of the respondents is 1,711 yuan. Assuming that residents only rely on monthly pension savings to achieve their pension wealth reserve goals, for those who have pension plans and have implemented them, it is necessary to achieve The retirement goal takes 115 years.
Therefore, it is absolutely impossible to live a satisfactory retirement life solely relying on pension savings.
Fidelity Fund’s years of observation, research and analysis in overseas markets such as the United States, Europe and Japan have shown that carrying out retirement planning from a full life cycle perspective and allocating retirement assets based on the characteristics of different life stages is an effective way for investors to carry out retirement reserves. Way. Looking at the financial status of different life stages, pension asset allocation needs are mainly divided into three stages: capital growth period, capital preservation period and capital payment period.
Investors have about 20-25 years from the beginning of retirement savings to the time when retirement is approaching, with the accumulation of retirement wealth as the main task; the capital preservation period is about 10 years before retirement, with the investment goal of protecting retirement assets from large losses; The third stage is the capital payment period after retirement, which lasts about 25-35 years. The investment tools in this stage need to match the arrangement of cash flow expenditures to ensure a good retirement experience.
In China, the “Report” survey found that 21% of Generation Z (18-35 years old) have implemented retirement plans. This data is more common among the Mesozoic generation (males 35-54 years old, females 35-49 years old) and the new elderly (males 55-54 years old). 64 years old, female 50-59 years old), and silver-haired people (male ≥65 years old, female ≥60 years old) were 39%, 40%, and 34% respectively.
Data source: 2023 “China Residential Pension Wealth Management Development Report”
Since the late 1970s and early 1980s, the United States has adopted a “voluntary” personal pension system. Specifically, the company sets up personal accounts for employees, and the employees actively deposit funds. The company allocates funds according to a certain proportion and provides a basket of fund products for individuals to choose from, and they are responsible for their own profits and losses. This account is not a mandatory savings nor a fixed investment behavior, but it can enjoy the country’s tax benefits. As of the second quarter of 2023, the total assets of U.S. pension accounts increased by 3.1% compared with the first quarter of 2023, reaching $36.7 trillion. Pension assets account for about 31% of the assets of the U.S. household sector.
Unlike overseas developed markets, China’s pension system is not yet complete. China’s pensions mainly rely on the first pillar. Personal pension products are still in the preliminary exploration stage. The vast majority of people need to seriously face the problem of how to spend their old age peacefully.
According to data from the Ministry of Human Resources and Social Security and the National Social Security Fund, as of the end of 2022, the number of people insured by China’s basic pension insurance, the first pillar of pension insurance, reached 1.05 billion, with a scale of 7.4 trillion yuan, accounting for 59.71%; the second pillar, enterprise annuity There are 72 million people participating in and occupational annuity insurance, and the total annuity scale is 4.98 trillion yuan (of which the enterprise annuity scale is about 2.87 trillion yuan, and the occupational annuity scale is 2.11 trillion yuan), accounting for 40.18%; the number of third-pillar commercial pension insurance payers is 6.13 million people, with a scale of 14.2 billion yuan, accounting for only 0.11%.
“There is still a big gap between the current level of pension wealth reserves and the multi-level and diversified pension needs of the people. Specifically, the national pension insurance system can only provide protection to meet basic living needs. Traditional family pensions face many challenges. Residents Everyone’s awareness and ability to reserve wealth for retirement is still insufficient.” Dong Keyong, secretary-general of the China Pension Finance 50 Forum, said in the preface of the “Report” that pension finance is the blue ocean and key development direction of China’s financial business in the future.
The “Report” analyzes that residents lack a clear understanding of how much wealth reserves are needed to meet their retirement needs, and their low risk appetite leads to a mismatch between the current status of asset allocation and their expected retirement goals. At the same time, short-term investment becomes more obvious during market fluctuation cycles, and it is necessary to rely on diversified methods such as investor education, product design, and investment consulting to cultivate residents’ awareness of long-term retirement investments.
In addition to pension savings, my country’s banking, fund, securities and insurance industries can currently provide a variety of personalized and professional pension-specific products and product combinations such as insurance, financial products, funds, etc. According to information disclosed by the National Social Insurance Public Service Platform, as of September 6, 2023, there are 680 personal pension products in the market, including 465 savings products, 149 fund products, 48 insurance products, and financial management products. 18 products.
“Pension funds should become a key source of property income.” The “Report” stated that compared with the other three types of products, public pension funds have the characteristics of wide coverage of risk types and can match the needs of investors of different ages, incomes and risk tolerances, and are an important source of asset income for investors.
However, to the regret of the market, the current scale of pension fund products is low and the yield rate is not ideal.
According to Wind data, as of June 30, 2023, the number of Y shares of personal pension funds has exceeded 150, and the total size has exceeded 5 billion yuan. From a performance perspective, as of September 1, 2023, nearly two-thirds of the products this year have negative return rates.
Taking the CSI Senior Care Industry Index displayed on the China Merchants Bank APP on November 4 as an example, the return rate in the past six months was -11.97%, the return rate in the past year was -3.21%, and the return rate in the past three years was -36.91%.
“Whether it is the preparatory pension stage, the retirement financial stage, or the elderly service stage, professionals are needed to help residents make full life cycle wealth planning and achieve the preservation and appreciation of pension wealth.” The “Report” believes that the income from pension financial products Low interest rates and failure to find suitable products are the main reasons why most residents do not implement retirement wealth planning. The lack of professional retirement wealth planning consultants and concerns about product risks are also important factors that prevent some people from starting retirement wealth planning.