Gen Z Sandwich Generation Must Prepare This Before Retirement
Indonesia is expected to face a surge in the number of retirees by 2050, the majority of whom will belong to Generation Z and Millennials. This situation serves as a warning for the younger generation to begin preparing retirement funds early to avoid becoming trapped in the ‘sandwich generation’ phenomenon.
Stephanus Rudi OK, Chairman of the Board of DPLK Sinarmas Asset Management, stated that based on data collected since 2015, approximately 40 million people will reach retirement age by 2025, and this number is expected to continue increasing in the following decades. “There are already economic indicators showing 40 million people. Subsequently, there will be an explosion of retirees, with 70 million new retirees. The Gen Z and Millennial populations fall into this group,” said Stephanus during the launch of DPLK Sinarmas Asset Management at the Indonesia Stock Exchange (BEI) in Jakarta on Friday.
He noted that the increasing number of retirees could pose a major challenge if not balanced by the financial readiness of the public. The current productive generation faces the risk of declining welfare upon entering retirement if they do not possess long-term savings or investments.
Similarly, Syarifudin Yunus, Chairman of the Supervisory Board of DPLK Sinarmas Asset Management, assessed that the primary issue regarding pension funds in Indonesia is not just about income, but the low level of literacy and awareness among the public in preparing for old age. Consequently, many retirees face economic difficulties and remain dependent on family members, thereby creating a sandwich generation. He explained that the sandwich generation phenomenon is still prevalent in Indonesia, where an individual must bear the economic needs of parents, spouses, and children simultaneously.
“I want to say that in the future, parents should no longer be like me; this is the actual target. If education succeeds and access to pension funds becomes easier—everything is online now—it will help,” expressed Syarifudin.
To address these challenges, PT Sinarmas Asset Management has launched the Sinarmas Asset Management Financial Institution Pension Fund (DPLK SAM). This product is the first pension fund in Indonesia managed by an investment management company. DPLK SAM utilises a digital approach through the SimPensiun platform, which allows the public to register, monitor funds, change investment choices, and withdraw pension benefits online. The platform is designed to reach the younger generation, specifically Gen Z and Millennials entering their productive years.
The launch of DPLK SAM comes amidst low pension fund participation rates in Indonesia. Referring to the Roadmap for the Development and Strengthening of Indonesian Pension Funds 2024-2028, the industry density of pension funds as of late 2023 reached only 18.94% of the total 147.7 million workforce, according to data from the Indonesian Central Bureau of Statistics (BPS).
As a newly operating digital-based DPLK, DPLK SAM is targeting aggressive growth in the coming years. In 2026, the company aims for assets under management of IDR 150 billion with a participant count of 15,000 people.