Retirement today is not your grandparents’ retirement, or even your parents’. It is likely to last longer and be more active, putting a big premium on preparedness.
The sixth annual Aegon Retirement Readiness Report finds that American workers rank second in retirement preparedness among 15 countries.
U.S. workers exhibited a medium level of readiness, scoring 6.9 out of 10 on the latest Aegon Retirement Readiness Index, which measures six behavioral and attitudinal factors. India proved readier with a score of 7.6.
The report — a collaboration among Transamerica Center for Retirement Studies, the Aegon Center for Longevity and Retirement and Mongeral Aegon Instituto de Longevidade — focused on responses from 900 U.S. workers and 100 retirees. It was part of a larger set of interviews conducted in 15 countries spanning Europe, Asia, Australia and the Americas.
The survey found that American workers and retirees will continue to rely on government for 42% of their income in retirement, with the remainder equally split between their personal savings and employer workplace programs.
Fifty-seven percent of U.S. workers said they always made sure they were saving for retirement, compared with just 39% of workers globally.
The survey showed that habitual savers have a brighter retirement outlook compared with occasional savers:
Aware of the need to plan financially for retirement: 89% vs. 79%
Know the value of their personal savings in retirement: 80% vs. 57%
More confident they will enjoy a comfortable retirement: 56% vs. 38%
Some three-quarters of U.S. workers in the survey had a retirement strategy, compared with fewer than two-thirds of workers globally.
(Many other countries, though, rely less on workers to manage their own “strategies.”)
Thirty-two percent had a written strategy in place, compared with 14% globally, and 41% have a non-written one. Millennials were most likely to number among the strategists.
A quarter of American workers did not have a retirement strategy; these were most likely to be women and those with low incomes.
The survey found strategists were much likelier that non-strategists to be aware of the need to plan financially for and to save habitually for retirement. As well, three-quarters of those with a written strategy felt confident about achieving a comfortable retirement, compared with 39% of those with a non-written strategy and just 14% of those with no strategy.
Eighty-seven percent of Americans in the survey said their health was excellent or good, compared with 67% globally, while 13% said it was fair or poor. The percentage of those in excellent health gradually declined from 59% of millennials to 11% of those 65 and older.
Workers in excellent health were better positioned to be ready for retirement than those in good or fair health. Their score on the Aegon index was 8.0, compared with 6.6 for those in good health and 5.8 among those in fair health.