Only 12% of respondents globally are very optimistic that they will have enough money to live on when they retire, according to research by Aegon and Transamerica Center for Retirement Studies.
The Aegon retirement readiness survey 2013, which polled 12,000 workers and retirees in 12 Asian, European and North American countries, found that nearly two-thirds (65%) of UK respondents believe that future generations will be worse off in retirement than current retirees.
The majority (62%) of global respondents are expecting to work longer due to the global financial crisis. Nearly two-thirds (63%) expect their government retirement benefits to be less valuable due to government cutbacks.
The research found that 43% of respondents would like to transition gradually into retirement by changing their work patterns. Only 21% of respondents said their employer offers the option to move from full-time to part-time work.
Many younger respondents expect that it will be necessary to also provide financial support to aging family members during their own retirement. Three in ten (30%) respondents between the ages of 18 and 24 expect that they will have to provide financial support to aging parents, compared to 16% of employees aged between 35 and 44, and 8% of those between 55 and 64.
The research also found:
- 20% of respondents are ‘very able’ to understand financial matters related to retirement planning.
- 9% of respondents said their personal retirement planning process is ‘very well’ developed.
- 39% of respondents do not know if they are on course to achieve their desired retirement income.
- 53% of respondents would take fewer risks when it comes to saving for retirement.
- 42% of respondents are looking for investment products that offer greater protection against volatile markets.
- 52% of respondents would be interested in long-term care insurance and 58% would be interested in a product that provides guaranteed income in retirement.
Angela Seymour-Jackson, managing director of workplace solutions at Aegon UK (pictured), said: “Expectations of reduced benefits, rising longevity and inadequate savings is threatening to squeeze younger generations who face having to support older generations in retirement.
“This pending squeeze illustrates the urgency to strike a more harmonious balance among the roles and responsibilities of governments, employers and individuals in providing for retirement.
“Delaying retirement can be a means of bridging a savings shortfall. However, life’s unforeseen circumstances can derail the best of plans. It’s critical to have a back-up plan if retirement arrives sooner than expected.
“Across the world, thousands of Baby Boomers are turning 65 every day. Many of them are not financially ready for retirement and are seeking to extend their working careers by continuing to work full-time or part-time.
“Governments and employers can help employees achieve retirement readiness, while retaining valuable talent, by offering transition options for older workers nearing retirement.
“Retirement systems vary in countries around the world. However, they share the common objective of helping individuals and families prepare for retirement.
“In our rapidly evolving global economy, countries can learn from each other and share research, ideas and innovations to address the critical challenges that we all share, and begin to strive toward a vision in which future generations of retirees are better off than today’s.”