Few workers confident of comfortable retirement
By Lisa Barron
Few American workers, and even fewer workers around the world, are highly confident they will have an easy retirement, according to a new survey.
The poll, commissioned by the non-profit Transamerica Center for Retirement Studies and Dutch insurance company Aegon, found that just 28 percent of U.S. workers are “very” or “extremely” confident they will retire with a comfortable lifestyle, while a third are somewhat confident.
Only 19 percent of workers globally have high confidence they will have a comfortable retirement. The greatest percentage of those who feel that way are in China, where the rate is 41 percent, while the lowest rates are in France, with 6 percent, and Poland, with 4 percent.
“Despite improving economic sentiment, there is a continuing widespread lack of confidence about retirement prospects,” said Catherine Collinson, president of TCRS.
“The Changing Face of Retirement: The Aegon Retirement Readiness Survey 2014” polled 16,000 workers and retirees in 15 countries in North and South America, Europe and Asia.
“Although economies are improving, continued pressures on retirement systems around the world are driving the need for individuals and families, employers and policymakers to change the way they view retirement,” said Collinson. “We live in a time in which it is vitally important to find ways to help people achieve a financially secure retirement.”
Making it easier for people to save through automatic enrollment is one way to help improve the situation, according to Collinson. “What is surprising, our research found, is that simplifying the decision-making around the process of saving can also help increase savings rates,” she explained.
Globally, 63 percent of workers find the idea of automatic enrollment to be appealing, with an even higher response rate of 69 percent among American workers, the survey found.
When asked what they felt would be a reasonable amount to contribute if they were to be automatically enrolled, the average response among workers globally was 6 percent of annual pay, and in the U.S. it was even higher at 7 percent.
Collinson also said proper financial planning is crucial. Only 12 percent of workers globally have a written strategy for retirement, 44 percent have some sort of informal plan; 4 percent “do not know” and 40 percent say they have no plan at all. In the U.S., 35 percent of workers do not have a plan.
“It is nearly impossible to reach a destination without a roadmap and navigational tools. Workers can improve their retirement outlook by doing their homework, formulating savings goals, seeking expertise when needed, and creating a solid plan,” said Collinson.
The survey also found that many people want to ease into retirement, with just 32 percent of people worldwide planning to stop working immediately, and only 24 percent of people in the U.S. wanting to retire that way.
“People see themselves phasing into retirement vis-à-vis a gradual shifting of their time with less and less spend working and more on leisure and enjoyment,” Collinson said. “This vision cannot be achieved unless governments implement reforms and employers adapt new business practices to facilitate such a transition.”
Originally published on BenefitsPro.com