One in five Canadians expect to never retire, HSBC's The Future of Retirement Life after work? global study shows
VANCOUVER, Sept. 18, 2013 /CNW/ - Nearly one in five Canadian workers (17%) -- compared to 12% globally -- expect they will never be able to afford to retire fully, according to HSBC's global report, The Future of Retirement: Life after work? Of the 15 countries surveyed, Canada had one of the largest proportions of workers who thought this, just behind the UK (19%) and USA (18%).
Encouragingly, more than half (54%) of today's retirees said that their preparations for retirement turned out to be at least adequate. That said, two fifths of retired Canadians (40%) said that they had not prepared adequately or at all for a comfortable retirement, and 4% of those retirees said they would have to go back to work to cover their financial shortfall (compared to 14% globally).
The findings paint a particularly bleak picture for those living alone in retirement, with almost a quarter of those who are divorced or separated (24%) saying they don't think they will ever retire (compared to 20% globally).
However it's not all bad news, as many semi-retired Canadians cited largely positive reasons for staying in the workforce. For example, nearly half (47%) of respondents say they would like to keep active physically and mentally, 41% say they like working, and 35% say they feel it will ease the transition into retirement.
Betty Miao, Executive Vice President, Retail Banking and Wealth Management, HSBC Bank Canada, said: "People want to slow down in later life and, while some welcome the chance to continue working, many may not. Where some people regard a comfortable retirement as a natural entitlement, for a growing number this is not the case.
"Today's workers should prepare for retirement as early as possible to have some certainty for retirement. Life is full of reasons to prioritise short-term spending over longer-term planning, but the sooner people start saving, the less likely they are to have to rely on working in retirement."
HSBC's study suggests that even those who have retired may not be able to achieve the retirement they want. Over half (54%) of retired people surveyed in Canada who said they have been unable to realise their plans for retirement believed this was because they have less money to live on than they had expected.
HSBC's research summarised four actions, which may help today's retirement savers plan a better future for themselves:
Action 1) Don't rush into retirement
There is a view among retired people that they might have been too hasty in giving up paid employment. Nearly two-thirds (64%) of all survey respondents who entered semi-retirement wished that they had stayed in full-time employment longer. This regret is largely for positive reasons, with many retired people seeing work as an important means of keeping the body and mind active.
Action 2) Don't rely on one source of retirement income
Current retirees have three different sources of retirement income on average, wisely choosing not to generate all of their income from one place. Spreading their sources of retirement income and associated risks means that not all their eggs are in one basket.
Action 3) Plan your retirement with family in mind
Family will continue to be a major consideration in retirement planning, and may even grow in importance for the next generation. While many people aspire to travel extensively during their retirement, nearly half (49%) of current workers globally expect to have some financial responsibilities towards others even when they are themselves retired. This includes ongoing financial responsibilities for their adult children as well as supporting frail elderly parents.
Action 4) Be realistic about your retirement expenses
Many working people assume that their income needs will fall once they enter retirement. Yet 52% of global respondents in retirement have seen no reduction in their expenses, and 17% have seen their outgoings increase. Although people are familiar with the concept of increasing life expectancy, the consequent increase in later life medical and nursing care costs may not be well understood as people are still not doing enough to prepare themselves for these potential costs.
Notes to editors
- HSBC's The Future of Retirement programme is a world-leading independent study into global retirement trends. It provides authoritative insights into the key issues associated with ageing populations and increasing life expectancy around the world. The latest global report, Life after work?, is the ninth in the series and is based on an online survey of 16,000 people in 15 countries between July 2012 and April 2013 (1,046 Canadian respondents).
- Since The Future of Retirement programme began in 2005, more than 125,000 people worldwide have been surveyed.
- HSBC Bank Canada, a subsidiary of HSBC Holdings plc, is the leading international bank in Canada. With around 6,600 offices in 80 countries and territories and assets of US$2,645 billion at 30 June 2013, the HSBC Group is one of the world's largest banking and financial services organizations.
- For more information about The Future of Retirement, and to view all previous global and country reports, visit www.hsbc.com/retirement.
- Cicero Consulting is a leading consultancy firm serving the banking, insurance and asset management sector, Cicero specialises in public policy consulting as well as global thought leadership and independent market research. Cicero was established in 2001 and now operates from offices in London, Brussels, Washington and Singapore.
- As a market leader in pensions and retirement research, Cicero designed and analysed the research and wrote this report, with Mark Twigg as author and Paul Middleton as research director.
SOURCE: HSBC Bank Canada
For further information:
Head of Media Relations
HSBC Bank Canada
Senior Manager, Public Affairs
HSBC Bank Canada