Don’t feel too bad if you feel you have not saved enough cash for a comfortable retirement as you are just one among millions.
The US Census Bureau reckons 579 million people worldwide are in retirement already and millions more are approaching the day when they give up work for good.
But, says HSBC Bank, only one in five considers they have enough money in a pension, savings and investments to fund a comfortable retirement.
Those one in five are not grouped into pockets around the globe, but are spread reasonably evenly across even the richest countries.
The study looked at 15 countries and revealed millions of working people predict they will never have enough cash to retire.
Miserable options
The research also showed the more developed and rich a country, the more likely high numbers of workers felt unable to afford to retire.
In America, the figure was 18%, in the UK 19%, Canada 17% and 15%n in Australia.
Many workers have to pick from three miserable options when making retirement plans:
- Carry on working indefinitely past the official state retirement age
- Live on an amount of money that is less than expected and not enough to keep them in a comfortable lifestyle
- Work part time to cover the retirement cash shortfall
Across the world, an average 38% of workers aged between 55 and 64 years old agreed they had not made effective financial plans throughout their life to save for their retirement.
Many realise they do not have enough cash to finance their retirement and at some stage the money is likely to run out, says HSBC.
Retirement is expensive
“The global downturn has made financing retirement very difficult for many trying to survive on a fixed amount of cash that is giving diminishing returns as interest rates fall and the cost of living rises,” says the report.
“Governments are also struggling to raise enough taxes to maintain social security systems, so state benefits are likely to erode in value and become less of a safety net.”
The research found two-thirds of pensioners saw their income and standard of living drop on retirement, while a fifth saw it fall by 50%.
Many pensioners also felt their living costs did not drop in retirement, but changed focus as instead of spending on mortgages and working costs, they spent more on other expenses, like fuel costs as they were home more.
But almost all agreed they would be financially better off in retirement if they had started saving earlier.
Many people just don’t plan for retirement. In the US some actually believe that Social Security will be enough to carry them through retirement. The key has always been and still is to start saving/investing early in life, be consistent, take advantage of any employer matching plan, max out contributions when possible, avoid unnecessary risks with your nest egg and plan for multiple streams of income once retired (social security, pensions, dividends, part time work, etc.). There is a great deal of information about retirement available on the web and most is free. I use several site including the site Retirement And Good Living which provides information on finances, health, retirement locations, part time work and also has a great blog of guest posts from around the globe about a variety of retirement topics.