HSBC’s The Future of Retirement: The power of planning says that on a global average, planners save 2.5 times more towards retirement than those without a plan. As a result they enjoy 39% more in retirement wealth than the global average.
The study found people across the West expect to be worse off than their parents in retirement and fear financial hardship. One in five working age people in America don’t know what their main source of income in retirement will be. Conversely, in emerging economies in the East, rising incomes and living standards are merging with a culture of saving and self-reliance to create a generation of prepared retirement optimists, according to a press release.
In Malaysia, 84% of respondents have a plan, followed by 76% in China (both are countries with a tradition of individual and family financial responsibility). However, in France (where the state is the historic provider in retirement and where personal financial planning is a relative rarity) just 30% of people have a plan in place for their own and their family’s future.
Globally, 32% of respondents expect to face financial hardship in retirement. However, in line with the East’s generally more optimistic stance, this falls to 17% in China.
Two-thirds (65%) of Americans believe that financial planning is important to a happy retirement, but only 36% are actively planning financially for their retirement.
In fast-developing economies people tend to be optimistic about their retirement: 69% in Malaysia associate retirement with freedom, while this falls to 28% in Poland.
Fifty-four percent of Americans see retirement as an age of freedom. Married couples are the most confident of this. Even so, 49% of respondents do not feel financially prepared for retirement.
Sixty-four percent of American respondents are concerned that they have not saved enough for retirement, with 59% expecting to be worse off than their parents in retirement – due to the uncertain labor market and the decline in value of Social Security. Banks and independent financial advisers are the top two sources of advice in the U.S.
According to the report, many people in the West blame their expectation of being worse off in retirement than their parents on the decline of traditional pension schemes. In the U.K., 57% of respondents say company pensions are becoming less generous, as do 43% in the U.S. – compared to just 17% in South Korea and 19% in Malaysia.
HSBC Bank’s The Future of Retirement program is an independent study into global retirement trends. The 2011 report, The power of planning, is the sixth in the series and is based on interviews with more than 17,000 people in 17 countries. Since The Future of Retirement program began in 2005, more than 110,000 people worldwide have been surveyed.More information is at http://www.hsbc.com/futureofretirement.