Administration November 6, 2003

Americans Show More Concern For Retirement Future

June 11, 2003 (PLANSPONSOR.com) - Even though American and Europeans expect to live better in retirement than they do now, Americans are more likely to be very concerned about their financial futures than their Euro peers.
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Overall, three-quarters of Americans said they were “very concerned” about their futures, compared with 34% of Germans, 57% of Italians, and 63% of people in Great Britain .   Reaching beyond the Eurozone though shows similar levels of concern among the Japanese (72%) and higher levels with the population of Chile (80%), according to a study conducted by Principal International, a unit of the Principal Financial Group as reported by Dow Jones.

However, Americans have taken their concern one step further, being more likely than 500 people in each of 11 different countries  to calculate how much they might need for retirement. Roughly 40% of Americans have put pen to paper to calculate a figure, compared with 32% from Japan and Germany – the next highest ranking on the list.

“Citizens of other countries appear to be significantly more comfortable about their financial well-being,” but at the same time they are less likely to have figured out what it will take to get there, Norman Sorensen, president of Principal International told Dow Jones.   This is attributed to government sponsored retirement plans in many of the European countries that give many in those countries a feeling of security, Sorensen said.

However, Sorensen said he maintains more confidence in the retirement capabilities of populations with defined contribution plans that force people to take responsibility for their own retirement. The best examples, he said, would be the US, Chile, Mexico and Hong Kong.

“Chileans are among the most secure” because they have had a mandatory contribution system in place for decades, he said. Hong Kong and Mexico have adopted similar systems more recently, he added.

Additionally, participants in these plans were more likely to expect a higher standard-of-living in retirement. Overall the number that said they would see a better life in retirement compared to now was:

  • Chile (29%)
  • Mexico (37%)
  • Hong Kong (26%)
  • US (24%).

Comparatively, only 19% in England, 17% in Italy, 12% in France and 7% in Germany said the same.

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