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Retirement Planning > Retirement Investing

Retirement confidence differs globally

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A little more than half of Americans believe that future generations will be worse off financially than they are, a view shared by most Europeans, but only one in five Chinese, according to a new report.

Conducted by the nonprofit corporation Transamerica Center for Retirement Studies in collaboration with Aegon N.V., The Hague, Netherlands, the report, “The Changing Face of Retirement: The Aegon Retirement Readiness Survey 2013,” polled 12,000 workers and retirees in 12 European, North American and Asian countries.

Nearly two-thirds (65 percent) of all respondents believe future generations will be worse off in retirement than current retirees, the report reveals. French and Hungarians are most likely to believe this (both at 80 percent) and the Chinese are least likely (20 percent). In the U.S., more than half (55 percent) share this sentiment.

Nearly two out of three employees surveyed (63 percent) expect their government retirement benefits will be less valuable due to government cutbacks. The expectation is highest in the Netherlands (72 percent), lowest in Sweden (41 percent) and 65 percent among American workers.

Forty-four percent of employees surveyed expect their employer or pension fund will reduce their workplace retirement benefits. Thirty-seven percent expect this in the U.S., and the highest percentage of this expectation are reported in the Netherlands (55 percent) and lowest in Sweden (26 percent).

The survey adds that 30 percent of employees ages 18 to 24 expect that they will have to provide financial support to aging parents, compared to 16 percent of employees between 35 and 44 and only 8 percent between 55 and 64. In the U.S., 32 percent of employees between the ages of 18 and 24 expect to financially support their aging parents.

The majority of employees (62 percent) expect to work longer due to the global financial crisis, with the highest response rates seen in the Netherlands and France (68 percent), the lowest in China (46 percent), and 62 percent in the U.S., the report adds.

Of the retirees surveyed, nearly half (49 percent) retired sooner than expected, a percentage that is higher in the U.S. at 60 percent. Among U.S. retirees, the majority of those retiring early did so for negative reasons, such as health issues (40 percent) or job loss (26 percent). Only 8 percent retired sooner because they had saved enough.

The survey additionally found that many employees (43 percent) want to transition gradually into retirement by changing work patterns (i.e. working part time, or with less demanding responsibilities). However, only 21 percent of employees indicate their employer offers the option to move from full-time to part-time work.

The most accommodating employers offering these options are in China (32 percent) and least accomodating in Japan (14 percent). Just 17 percent of U.S. employers report the availability of a full- to part-time transition for older workers.

The retirement-related risks faced by employees are compounded by widespread financial illiteracy, with only 20 percent of respondents saying they are “very able” to understand financial matters related to retirement planning; the response rate was slightly higher in the U.S. at 26 percent.

Other key measures the survey found include:

  • 9 percent of people globally (12 percent in the U.S.) say their personal retirement planning process is “very well developed”;
  • 9 percent (14 percent in the U.S.) have a written plan for retirement;
  • 37 percent of employees globally (37 percent in the U.S.) don’t know if they can achieve their desired retirement income;
  • 12 percent of respondents are “very optimistic” that they will have enough money to live on when they are retired.


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