Study Shows We Need To Start Saving Longer For Retirement

Retirement PiggieIf you’re currently retired, chances are you worked hard to ensure that your retirement would be financially stable. For those who are currently working, this will be even more of a challenge. According to a new HSBC study, working people of today are expecting to spend much more time saving for retirement. Researchers interviewed more than 18,200 people across 17 countries either face-to-face or online. Through this research, HSBC discovered that workers in the U.S. now believe they will have to save for an average of three decades in order to feel financially secure for retirement. That’s seven years more than the previous generation had to save.

Investors have started to shift the way they think about retirement after seeing the challenges of those who have retired or who haven’t planned effectively for retirement. A large number of people in their forties are supporting other people, such as their children and their aging parents. These people and the people who are watching them are becoming aware that they need to take an active role in preparing for retirement.  

The UK’s citizens are especially concerned about their economic future after the Brexit. It is too early to decide what the long-term of the impact of the Brexit will be. That said, pre-retirees should always be ready for potential financial turmoil. In fact, global growth and an ageing population are causing concerns about the retirement of future generations all around the world.

HSBC’s research, which was conducted prior to the Brexit vote, shows that the U.K has pre-retirees expecting to save for an additional seven years, just like the U.S. The country whose working community is expected the struggle the most is China, where pre-retirees are expecting to save for an additional 14 years, bringing their total up from 9 years to 23 years.

The United Arab Emirates, France, Hong Kong, and Australia, are also expected to suffer, with each average working citizen planning to save for an additional 10 years or more. Indonesia, on the other hand, is the only country that doesn’t expect to save for any longer than it currently does.

In addition to an increase in the amount of time working people will need to dedicate to saving for retirement, there is also a shift in the ways that working people intend to save. Instead of traditional state pensions, workers are looking to alternative saving methods such as personal pension schemes, cash savings and deposits, and downsizing or selling property. Over a third of the working population stated that they wish they’d begun saving earlier on. Twenty-four percent said they hadn’t begun savings. This group included 12 percent of people in their sixties who were studied. However, the working population is getting overall more financially conscious. But this doesn’t mean they are free of worries. Forty two percent of people who are saving to prepare for retirement admitted to having stopped or having faced challenges.

While people save in different ways, it is important that individuals start saving for retirement as early as possible. In addition, it is important to get advice from professionals and to consider the essential retirement expenses. But the most important piece of advice for retirement savings is to always be prepared for ups and downs.