Few workers in the U.S. and around the world are truly confident they’re going to have a comfortable retirement, a new global survey shows.
Only 28% of U.S. workers are “very” or “extremely” confident that they’ll one day fully retire with a comfortable lifestyle; a third are somewhat confident.
And 19% of workers globally have high confidence levels that they’ll have a comfy retirement, with the greatest percentage of people feeling that way in China (41%) and the lowest rates in France (6%) and Poland (4%), according to the survey of 16,000 workers and retirees in 15 countries in Europe, North and South America and Asia. The survey was commissioned by the non-profit Transamerica Center for Retirement Studies and the Dutch insurance company Aegon.
“Retirement systems vary by country, yet we all have in common an aging population and a need for people to take on more personal responsibility for long-term financial security,” says Transamerica Center President Catherine Collinson. “Workers around the world face the increasing need to save, plan and self-fund a greater portion of their own retirement.”
She says that workers in China may be more confident about their retirement than those in other nations because the country has “a booming economy,” and the survey responses were “predominantly from urban areas in China where people may be benefiting from the economic boom.”
Still, she says, 53% of workers worldwide expect future generations of retirees to be worse off than those currently in retirement. About 80% of workers in Germany, Hungary and France expect future retirees to be worse off than current retirees. “This is likely a reflection of the financial pressures on some countries’ retirement systems, as well as the global financial crisis,” Collinson says.
About 41% of workers globally say they’ll rely on the government to fund their retirement to some extent, but only 21% expect the government to be their main source of income. When asked about a retirement-planning strategy, 56% of workers have some sort of plan, either written or unwritten; 40% say they have no plan, and the rest don’t know.
“In the U.S., we are at the forefront of people planning and saving,” Collinson says. “We have the highest rate of people — 50% — being what we call habitual savers, meaning they always make sure they save for retirement. A reason is that 401(k)s and similar plans here are so widespread.”
Many people want to ease into retirement, with only 32% of people worldwide planning to immediately stop working; only 24% of people in the USA want to retire that way. Some people envision working longer and fully retiring at an older age, possibly transitioning into retirement by shifting from full-time to part-time work or taking on a role that is less demanding and more personally fulfilling, Collinson says.
“We have a collective mindset that age 65 is retirement age,” she says. “That date was set a long time ago, and now, some people are living into their 80s, 90s and 100s, so relatively speaking, 65 is still young. If someone started working at age 25, retires at age 65 and lives to 105, then they’ll spend as many years in retirement as they did working,” she says.
- 45% of retired respondents worldwide say they had to retire sooner than planned because of their own ill health (34%) or loss of a job (25%). The number is higher in the U.S., with 67% saying they retired sooner than they expected. That may be because “people in the U.S. typically expect to work longer and retire at an older age than people in other countries for a variety of reasons,” Collinson says.
- 61% of workers worldwide and 59% of those in the U.S. say they have no financial backup plan to provide them with an income in the event that they become unemployed or are unable to work for a prolonged period before their planned retirement.
- When it comes to the economy, 28% of workers worldwide expect their country’s economy to improve in the coming year, up from 19% who felt that way in 2013. Workers in Brazil have the most optimism (69%) about their economy, followed by those in India 48%) and China (35%), while only 12% of workers in Germany and France expect their country’s economies to get better in the next year. About a quarter of U.S. workers hold this view.
Source: USA Today