Expectations of retirement havent quite bounced back since the recession, and retirement security is increasingly becoming a topic of concern for workers around the world.
A recent Towers Watson survey of more than 22,000 employees in 12 different countries found that in developing nations, including Brazil, China and India, between two-thirds and three-fourths of respondents expect economic progress to usher in continually improving standards of living in retirement. Conversely, in developed economies such as the U.S., Japan, Australia and the U.K., only 20% to 40% of employees are expecting to enjoy the same, or better, living standards in retirement than earlier generations, according to the Towers Watson Global Benefit Attitudes Survey.
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Retirement security has taken on heightened importance for employees across the globe, with a majority of respondents in all countries recognizing the need to save more, both generally and specifically for retirement. Unsurprisingly, older workers in particular have made saving for retirement a higher priority, the report notes.
For instance, confidence among employees to live comfortably throughout retirement begins to wane as the years progress. In the U.S., India and Mexico, 69% and more believed they would be living comfortably 15 years into retirement.
However, when asked to forecast 25 years into retirement, only India remained high at 73%, and other countries including the U.S., Australia, Japan and the U.K. were far shakier, with 45% of respondents believing they would be living comfortably 25 years into retirement. Employees in Japan reported being the least confident 25 years into retirement, with just 18% saying they believed they would be living comfortably.
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In many developed economies, one-third to nearly one-half of employees say they have decided to extend their working years. The average increase is five years in Australia and the U.S.; four years in Canada, Japan and the UK; and three years in Germany and the Netherlands.
On the other hand, in developing economies, most workers havent changed their anticipated retirement age over the past three years. And among those who have, more expect to retire sooner rather than later.
Another interesting trend revealed by the data shows that workers in developing nations feel more confident their retirement years will be better off than those of their parents. Seventy-three percent of respondents from India and Brazil believe they will be better off in retirement than their parents. Confidence levels in developed countries, meanwhile, were below 40%, with between 20% (Japan) and 38% (Canada) of workers feeling optimistic they would fare better in retirement than their parents.
Most employees, globally, believe they are behind schedule on saving and find it difficult to catch up because they may not have the financial means to do more in this environment, says David Speier, senior consultant at Towers Watson. Its no wonder that retirement security has taken on heightened importance for employees worldwide, with the majority in all economies recognizing the need to save more, both generally and specifically for retirement.
Nevertheless, the effects of economic weakness still linger in many countries, and keeping up with household costs is the No. 1 financial priority, inhibiting many from saving for retirement.
