Survey after study highlights a now unsurprising finding: the alarming lack of retirement preparedness among working-age adults. The latest report, which focuses on women worldwide, is no exception.
The 2014 Aegon Retirement Readiness Survey, a collaboration of Aegon and Transamerica Center for Retirement Studies, reveals that only 1 in 5 women globally believe they are saving enough for retirement. And 40 percent say that they don’t know if they are on track.
“Our findings show that while women are successfully closing the gender gap in some areas of their lives, they are less prepared than men are for retirement,” the report states. “Different working patterns and extra child care responsibilities often prevent women from taking steps to plan and save for later life.
“Broadly, women share the same hopes for retirement as men,” the report adds. “But as many as half lack confidence that they will enjoy a comfortable retirement.”
The survey reveals that nearly a quarter (24 percent) of women associate retirement with “insecurity” and almost one-fifth (18 percent) with “poverty.”
The survey is based on responses from 16,000 employees and retirees in 15 countries (including the U.S.), more than half of whom are women (7,956 in total), married or cohabitating (62 percent) and have an undergraduate degree or higher (52 percent).
The study indicates the age at which women expect to enter retirement varies by as much as 12 years, according to where they live. On average, women expect to retire at the age of 62. Women expect to retire much later in the U.S., around the age of 66, whereas in China the expected retirement age is just 53 (the official age at which women there become eligible to claim retirement benefits).
Expected replacement income needed in retirement varies by 27 percent among women across the countries in the survey. Women in Hungary, for example, think they will need to replace up to 86 percent of their current earnings. This falls to 59 percent of working-age income among women in India.
The report also finds that:
Half (49 percent) of women in work are not confident they will be able to retire with a lifestyle that they consider comfortable. This peaks at 88 percent among women in Poland.
The lack of preparedness is reflected by a score for women of just 5.5 (out of 10) on Aegon’s Retirement Readiness Index. Men score a 6.0 on the Index.
Only 10 percent of survey respondents say they feel very prepared for retirement and are saving enough. More than twice as many (23 percent) say they feel “very unprepared” and are hardly saving at all.
Only slightly more than one-third (36 percent) of women claim to be dedicated savers whose approach is always to make sure they are saving for retirement.
Over half (54 percent) of women who are married or living with a partner anticipate they will be dependent on their spouse’s income during retirement.
Charts starting on the next page highlight key findings from the Aegon-Transamerica survey. As these charts show, women have now largely closed the gap with men in terms of educational achievement. Women in the survey are as likely as men to graduate from high school and have a college undergraduate or graduate degree.
The survey observes, however, a lower rate of full-time employment among women than men; and, conversely, a higher incidence of part-time employment. Additionally, women, on average, generate about 27 percent less in income than men do. And they have a reduced access to workplace retirement benefits. (Click to enlarge charts.)
On average, women envision entering full retirement at age 62, but this number varies by country. In the U.S., women expect to retire at about age of 66, whereas in China the expected retirement age is just 53 years. A key factor underpinning the age range: differences in policies within each country as to when individuals can begin receiving government retirement benefits.
As a percentage of current earnings, women in the U.S. expect they’ll need on average 67 percent of gross income in retirement. This compares with significantly higher percentages among their counterparts in Hungary (86 percent), Poland (81 percent) and Brazil (77 percent). In contrast, the U.K. (63 percent), Turkey (60 percent) and India (59 percent) cite the lowest percentages of current income.
Interestingly, the highest percentages of women who express great confidence in their ability to retire comfortably hail from several of the BRIC countries: Brazil (29 percent), India (35 percent) and China (42 percent). These percentages contrast sharply with their counterparts in European countries, including Poland (2 percent), Spain (5 percent) and France (also 5 percent).
The above percentages correlate in some measure with women across countries who say they are saving enough for retirement. Those of India and Brazil again rank at the top: 23 percent and 19 percent, respectively, followed by the U.S. (15 percent). However, China is in the 7th spot at 10 percent. Countries where the fewest percentage of women are saving enough include Hungary (2 percent), Japan (2 percent) and Spain (5 percent).
As these pie charts reveal, women who say they “always make sure to save” are most prevalent in Sweden (48 percent), China (47 percent) and the U.S. (46 percent). The lowest percentages of women who say the same on this question are located in Poland (21 percent), Turkey (24 percent), and Spain (24 percent).