Planning is the key for people to achieve their retirement aspirations

The world’s population is growing more slowly than it has in decades. It’s also getting older at the fastest rate in history.

These two demographic trends have huge implications, affecting everything from how quickly the global economy grows to what people consume and when they can retire. So for many people, they will play a key role in determining their future plans and well-being.

Everyone aspires to a comfortable retirement. Many people have firm ideas about how they will spend their time – relaxing, travelling or caring for their family. Yet there is often a gap between hope and reality: between the age at which people would like to retire and the age they can afford to do so.

In most developed economies, state pensions are being squeezed. Some are also raising statutory retirement ages. At the same time, many private businesses have been scaling back their company pension schemes.

And it is not just developed economies that are getting older. Nations such as China are also ageing: HSBC economists forecast that its working-age population will shrink from this year onwards. And while some countries, including China, are increasing social provision, they are starting from a low base.

Working-age people globally expect to save for seven years longer on average than people who have already retired

Even in those countries with good demographics in the form of a youthful population, there is a growing recognition that saving and investing more is the only sustainable way for individuals to support their retirement over the long term.

Around the world, the pressure on working-age people to save for their retirement has arguably never been greater.

In HSBC’s new report, The Future of Retirement Generations and journeys, more than 18,000 people in 17 countries and territories were surveyed on their attitudes towards retirement. The report found that the current generation of retirees saved for their retirement for an average of 23 years, starting at about age 35 and retiring at about 58.

Today, however, working-age people globally expect to save for seven years longer on average than people who have already retired. They are starting to save far earlier, at about 30, and anticipate that they will not be able to retire until 60.

The generational shift is even starker on a country-by-country basis. In China, the UAE, Australia and France, working-age people surveyed by HSBC expect to have to save for more than a decade longer than current retirees.

But while people recognise they need to save more for retirement, the research also highlights that they are worrying more. Working-age people often don’t think they are saving enough and many wish they had started saving earlier.

The key is to plan ahead. A good plan will cover a range of ways to achieve retirement goals. So while many people may still be able to rely on state or personal pension schemes, and savings and investments, they may want to consider other forms of income that could boost their retirement pot. An increasing number of people, for example, expect to use property to help fund their retirement, while others plan to continue working to some extent.

Planning ahead means recognising that priorities may change over time and that there may be unforeseen expenses and events. The key is to start early, seek advice if necessary and recognise that even small amounts of money set aside today can go a long way to help fund a comfortable retirement in the future.

Read more about the HSBC report The Future of Retirement Generations and journeys in our media release.

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