For the majority (81%) of working-age Americans, saving for retirement is not their main priority, according to HSBC’slatest report, “The Future of Retirement: A Balancing Act.”
“For many working-age people, saving enough for a comfortable retirement is difficult,” said Charlie Nunn, group head of wealth management for HSBC, in a statement. “The global economic downturn has hit retirement saving hard. Many people have had to rethink their retirement plans and there are other priorities too — families to support and mortgages to pay.”
The U.S.-specific findings — out of a global report that represents the views of more than 16,000 people in 15 countries — reflect a nationally representative survey of 1,000 people of working age (25 and older) and in retirement based on an online poll conducted by Ipsos MORI in August and September.
The HSBC report found that debt repayments are the biggest barriers preventing working age people from adequately preparing for a comfortable retirement. According to HSBC, a quarter (25%) of pre-retirees say they are paying off their mortgage, while over half (51%) say they are paying off other debts.
Other priorities included saving for children’s education, a rainy day or a vacation.
It’s these “more immediate financial commitments” and other life events that have had an impact on pre-retirees’ ability to save for retirement, HSBC says.
According to the report, 76% of working-age people has had their ability to continue saving for retirement impacted by a major life event.
“While some of these events can be planned for, such as buying a home or paying a mortgage (27%) or starting a family (13%), unexpected events can also have a significant impact,” the U.S.-specific findings state. “Unforeseen life events like illness, divorce or losing a spouse can have a significant impact on a person’s financial situation, before and after retirement.”
More than 1 in 10 working age people (14%) faced an unexpected illness that stopped them or their spouse from working, with a knock-on effect on their retirement saving. In addition, unemployment affected the abilities of 27% of those surveyed to effectively save for retirement.