Queen Máxima Urges Young Indonesians to Prepare for Retirement and Insurance Early

Importance of Long-term Financial Planning

Queen Máxima, Special Advisor to the UN Secretary-General on Financial Health, emphasized that Indonesia's young generation needs to prepare their financial future through long-term planning, including retirement funds and insurance. Speaking at the National Financial Health Event in Jakarta, she highlighted that while long-term planning is crucial, it remains the biggest challenge, especially for young people.

Challenges in Financial Planning

The Queen pointed out that automatic or default mechanisms are necessary to encourage saving habits and build financial protection. She cited the 'Pension 3 Days' program in the Netherlands as an example, where companies are required to discuss retirement planning with employees for three days annually. This program has been effective in increasing awareness and participation among workers in preparing for their old age.

The Sandwich Generation Phenomenon

During her visit to Solo, Queen Máxima encountered the phenomenon of the 'sandwich generation' - young people who have to support both their parents and children. She noted that this condition is becoming more common and increases the urgency of long-term financial planning. However, she also emphasized that retirement or insurance preparation cannot be separated from more basic financial foundations, such as the availability of emergency funds.

Indonesia's Financial Readiness

Queen Máxima believes Indonesia has strong potential to enhance the financial readiness of its young generation. This can be achieved through the integration of financial literacy, appropriate financial products, and policies that encourage sustainable saving behavior. Data from UNSGSA shows that 1 in 3 Indonesians save less or not at all due to increasing living costs. Moreover, nearly 99% of bank savings accounts have balances below IDR 100 million, indicating limited savings capacity.

Retirement Preparation Statistics

The data also reveals concerning statistics about retirement preparation in Indonesia. Four out of ten people rely on regular savings for retirement, while two out of ten use deposits as their primary instrument. By 2050, more than 20% of Indonesia's population will be over 60 years old. However, only 1 in 10 people save formally for retirement, and 30% are unaware of their retirement needs. Only 16% of workers are registered in the mandatory Old Age Security program, leaving the majority without adequate retirement protection.