The average American expects to spend five to seven additional years in the workplace compared with those who are currently retired, according to HSBC Group research.
Copious amounts of research show this is likely not a realistic goal, but that fact hasn’t dampened Americans’ optimism about bucking the wider trends and working well beyond the traditional retirement age, according to HSBC’s report, “Future of Retirement – Generations and Journeys.”
According to the analysis, 44% of American pre-retirees wish they started saving earlier. This is despite the fact that Americans already begin to save for retirement earlier and work more years than their global counterparts, HSBC finds. In fact, many working age Americans who are already saving still don’t think they are saving enough, with 33% of those currently saving saying they should have saved more already by putting aside a larger share of income.
HSBC’s report also uncovers that almost one in seven (14%) working-age people in the U.S. have still not started saving for their retirement, including 3% of those aged 60 or over.
“American retirees rely less on their children for support (3%) compared to the global average (12%),” HSBC explains. “Instead, over half of retirees in the U.S. are using cash savings to fund retirement (56%), the third highest amount globally. Other forms of funding include Social Security (51%), stocks (38%), mutual funds (32%) and a spouse or partner’s income (29%).” In another interesting finding, Americans are also “more inclined than retirees in other countries to depend on income earned from selling property, ranking the third highest at 10%.”
In the U.S., women remain less likely than men to have started saving for retirement, with 17% of women having not started saving for retirement at all, compared to 10% of men. On average, men began saving at the age of 29 while women waited until 34, the report shows.
NEXT: Key findings and practical steps
The HSBC research goes on to show that nearly a quarter (22%) of pre-retirees have never received any formal advice or information about retirement, despite the fact that a strong majority (59%) of those surveyed say “financial security is one of the things I value most in life.”
As such, the research identifies four actions that people can take to help improve their financial well-being in retirement:
- Consider all retirement expenses – Forty percent of retirees cited credit card repayments as a retirement expenditure, however, only 20% of pre-retirees expect to be repaying credit cards when they retire. When planning for retirement, make sure to list all possible retirement expenditures.
- Start saving earlier for retirement – Plan to start saving for retirement earlier, to help build a bigger fund and allow it to grow for longer.
- Seek advice from a professional – Eleven percent of retirees have received financial advice from only friends or family. Seek information from many sources, HSBC says, “but make sure the advice you get is professional.”
- Expect the unexpected – Thirty-five percent of pre-retirees who are saving for retirement have either halted or struggled to save at some point. “No one can predict the future,” the research concludes, “but preparing for unforeseen events can soften the impact of unforeseen life events if they do occur.”
Additional research findings and information are here.