Retirement may seem like a distant milestone, tucked away in the far-off future, and for many, it’s not a priority in the present. In Bhutan, as in other parts of the world, the idea of retirement planning often takes a backseat to immediate financial concerns and cultural norms. But why do people tend to overlook this crucial aspect of life?
Here’s a closer look at some reasons why retirement planning often gets neglected in Bhutan, and why it’s time to start changing that mindset.
1. Cultural Values and Family Support
In Bhutanese culture, strong familial bonds play a significant role in shaping financial priorities. Traditionally, children are expected to take care of their parents in old age. This intergenerational support system has been a cornerstone of Bhutanese society, reducing the perceived need for personal retirement planning.
However, as modernisation and urbanisation take hold, traditional family structures are evolving. Young adults are moving to cities, family sizes are shrinking, and the costs of living are rising. Relying solely on family support might no longer be enough, highlighting the importance of individual financial preparation for retirement.
2. “Too Early to Think About It” Mentality
Retirement often feels like a faraway chapter, especially for young professionals. In the early years of one’s career, priorities tend to centre around immediate needs like education loans, housing, or starting a family. Planning for retirement feels less urgent compared to these pressing financial goals.
This mindset, however, misses a critical point: the earlier you start saving for retirement, the greater the benefits of compound interest. Every year you delay could mean losing out on significant growth in your retirement fund.
3. The “Live for Today” Philosophy
Bhutan’s focus on Gross National Happiness emphasises living in the present and valuing experiences over material wealth. While this philosophy contributes to overall well-being, it can sometimes lead to an underestimation of future financial needs.
The challenge is to strike a balance: enjoying the present while ensuring financial security for the future. Planning for retirement doesn’t mean sacrificing today’s happiness; it’s about creating peace of mind for tomorrow.
4. Unrealistic Expectations About Income in Retirement
Many people assume their expenses will decrease significantly after retirement, but this isn’t always the case. Healthcare costs, for instance, tend to rise as people age. Moreover, retirees often aspire to travel, pursue hobbies, or support grandchildren, all of which require financial resources.
Without proper planning, the gap between expectations and reality can lead to financial stress in retirement.
Changing the Mindset
While these reasons explain why retirement planning is often overlooked, it’s never too late to change the narrative. Here’s how Bhutanese individuals can start prioritising their future:
- Educate Yourself: Learn about Bhutan’s pension and provident fund systems. Understand your contributions, benefits, and what additional savings might be needed.
- Start Early: Even small contributions to a retirement fund can grow significantly over time, thanks to compound interest.
- Explore Additional Savings Plans: Consider options like the other investment vehicles to supplement your pension.
- Break the Taboo: Talk openly about retirement planning with your family, friends and colleagues. The more it’s discussed, the more normalised it becomes.
Posted by Tashi Gyaltshen Wangchuk, (Media and Communications Officer, NPPF)
