HSBC: Future of Retirement – A new reality – Global Report

by Sabrina I. Pacifici on February 21, 2013

The Future of Retirement – A new reality – Global Report: “This report reveals that saving and investing for retirement is a major challenge for most people. The economic downturn is putting added pressure on household incomes, and as a result, many people admit that financially they are not preparing adequately, or at all, for a comfortable retirement…In order to sustain a comfortable standard of living in retirement, people say they would need 78% of current income; this is far higher than is likely to be achieved. For example, the median annual household income required for a comfortable retirement is $34,380 (global median), which would require a US male to have $505,000 in retirement savings, based on a retirement age of 65. Actual savings behaviour falls well short of this. Currently, 48% of respondents across the 15 countries have never saved towards their retirement, with more non-savers in high-income countries such as the UK, France, Canada and Australia. Meanwhile, nearly one-third (32%) of respondents expect to rely on the state for their main source of retirement income. Over half (56%) acknowledge that they are not preparing adequately to achieve a comfortable retirement. Too much life, not enough money People on average expect their retirement to last for 18 years, but their retirement savings to last for only 10 years, running out just over half way through retirement. The second half of retirement often coincides with the point at which health and long-term care costs increase, posing major questions over how people will cope with the additional costs of ‘frail’ retirement. The impact of retirement income shortfalls are not limited purely to one’s finances: for example, 43% of Canadians thought that this shortfall could potentially impact their health, while 62% of Britons thought that they might struggle to pay for food and energy bills…”

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