How much sav­ings does a per­son in China need for retire­ment? A report released by Sun Life Fin­an­cial Inc, based on a quant­it­at­ive sur­vey of 3,201 respond­ents and more than 20 expert inter­views, found that 65 per­cent of respond­ents believe 1 mil­lion yuan ($148,200) is suf­fi­cient. However, the report estim­ates that a retiree spend­ing an aver­age of 5,000 yuan per month over a 30-year retire­ment would need at least 1.8 mil­lion yuan, assum­ing no infla­tion.

Data released by the National Bur­eau of Stat­ist­ics on Jan 19 showed that by the end of 2025, China’s pop­u­la­tion aged 60 and above had reached 323.38 mil­lion, account­ing for 23 per­cent of the total pop­u­la­tion.

In Septem­ber 2022, an offi­cial with the National Health Com­mis­sion said China’s pop­u­la­tion aged 60 and above is expec­ted to exceed 400 mil­lion by around 2035, account­ing for more than 30 per­cent of the coun­try’s total pop­u­la­tion.

Sun Life’s report found that China’s tra­di­tional mul­ti­gen­er­a­tional liv­ing arrange­ment is gradu­ally giv­ing way to more inde­pend­ent retire­ment life­styles. Nearly 60 per­cent of adults aged 60 and above now live alone or only with a spouse, while as many as 82 per­cent make their own retire­ment decisions.

The report said Chinese res­id­ents are mov­ing toward a new stage of “self-dir­ec­ted, qual­ity retire­ment”. Retir­ees increas­ingly seek inde­pend­ence and pro­fes­sional eld­erly care.

“Enjoy­ing retire­ment” has become a major pri­or­ity, with older adults show­ing a greater will­ing­ness to spend on emo­tional well-being, leis­ure and social exper­i­ences. More than 65 per­cent of sur­veyed seni­ors who are cap­able of liv­ing inde­pend­ently said they would spend at least 500 yuan — and in some cases sev­eral thou­sand yuan — per month on exper­i­ences that improve their qual­ity of life. Mean­while, “remain­ing pro­duct­ive in old age” reflects grow­ing demand among seni­ors for lifelong learn­ing and con­tin­ued social par­ti­cip­a­tion.

The sur­vey also found sig­ni­fic­ant gen­er­a­tional dif­fer­ences in retire­ment plan­ning. Older gen­er­a­tions still rely mainly on the basic pen­sion scheme and fin­an­cial sup­port from their chil­dren, while those under 60 are more inclined to rely on their own sav­ings and invest­ments. Com­mer­cial insur­ance has become much more com­mon among younger gen­er­a­tions, high­light­ing a shift toward pro­act­ive retire­ment plan­ning.

Speak­ing at a closed-door con­fer­ence hos­ted by China Busi­ness Journal in June, Gao Song­fan, a vet­eran pen­sion fin­ance expert and former vice-pres­id­ent of E Fund Man­age­ment, said China’s private pen­sion scheme, launched in Novem­ber 2022 in 36 pilot cit­ies and regions, has enriched the coun­try’s three-pil­lar pen­sion sys­tem by offer­ing diverse pen­sion asset alloc­a­tion options for people with dif­fer­ent employ­ment back­grounds and fin­an­cial needs.

By the end of 2025, more than 150 mil­lion private pen­sion accounts had been opened, Gao said.

“Every indi­vidual is ulti­mately respons­ible for his or her own retire­ment secur­ity,” he said, adding that people should act­ively pre­pare for retire­ment and gradu­ally increase the share of retire­ment assets in their per­sonal and fam­ily wealth.

Des­pite rapid account growth, the private pen­sion scheme still faces sig­ni­fic­ant chal­lenges. Over 70 per­cent of the accounts opened are inact­ive, while only about 22 per­cent of account hold­ers actu­ally make con­tri­bu­tions. Aver­age annual con­tri­bu­tions remain well below the max­imum tax-deduct­ible limit of 12,000 yuan per year, and less than 10 per­cent of pen­sion assets are inves­ted in equity products, Gao said.

At the con­fer­ence, Lyu Aiguo, deputy gen­eral man­ager of the pen­sion fin­ance depart­ment at Indus­trial and Com­mer­cial Bank of China, said three key factors are hold­ing back the devel­op­ment of the private pen­sion scheme. First, the wide range of pen­sion fin­an­cial products makes it dif­fi­cult for cus­tom­ers to choose suit­able invest­ments. Second, there is still room to improve the returns and sta­bil­ity of these products. Third, many account hold­ers are reluct­ant to invest, leav­ing a large share of pen­sion funds sit­ting idle.

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