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Workers worldwide pessimistic of financially secure retirement: Study

Sridhar Krishnaswami

Washington , June 18

IN spite of the global economic recovery and rising capital markets, workers worldwide are still discouraged about achieving a financially secure retirement, the pessimism reflected in the fact that only 22 per cent felt "very confident" that they will have enough money to pay for basic expenses such as food, shelter and clothing during retirement, the Global Financial Well Being Study done by the Principal Financial Group shows.

The study which covers 12 countries including India reveals that the percentage of those who foresee a worsening standard of living in retirement has actually increased between 2003 and 2004 in eight out of the 12 countries surveyed. The study covered Brazil, Chile, China, France, Germany, Great Britain, Hong Kong, India, Italy, Japan, Mexico and the US.

"This is the third year we have commissioned The Principal Global Financial Well Being Study and the numbers keep pointing towards worry, and in some cases, outright hopelessness about having a financially secure retirement," remarks Mr Norman Sorenson, President of Principal International, a member Company of the Principal Financial Group in a news release. "Through the economic ups and downs of the past three years, the study has kept us informed of one constant: a sobering and deep-seated pessimism about achieving a financially secure retirement," he has said.

Most participants do not have a rosy perception of their retirement and many think that their standard of living in retirement will be worse than it is now. For instance, 40 per cent or upwards of the survey participants in Italy, Germany, Brazil, the US, Japan and France foresee a worsened standard of living. And one of the worrisome findings is that only a minority of the participants in each of the countries surveyed is "very confident" of having enough money to take care of basic needs during retirement.

By and large study participants take the position that Governments and employers are not doing enough to ensure retirement security; but the "pockets of relative optimism" would seem to come from participants in Chile, China and India. And what is being pointed out is that to make matters worse "in every country there is a disturbing lack of financial preparation for retirement even though many study participants...say they are doing very well or well in preparing for retirement".

The "snapshot" of India shows that people in the country have a "relatively optimistic" view of retirement and seem confident in their ability to save for it. Indians are passed off as being the "most confident" of all surveyed with seven in 10 thinking they are doing very well in ensuring they will have a financially secure retirement — about 47 per cent think they are on track and another 20 per cent believe they are ahead of schedule in their retirement planning and saving.

The confidence, the news release says, stems from the amount of support Indians believe they will get from their families — while over half of those who surveyed are concerned of being a financial burden on their families, almost three fourths says they expect to receive financial support; and a similar number are hoping to live with children or relatives upon retirement.

What is also being pointed out is that this confidence among Indians has to do with trust in Government and a lesser extent on the employer for a financially secured retirement.

More Stories on : Economy | Trade & Labour Unions | Pension Plans

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