A majority of working-age Americans admit they are not prioritizing retirement planning and place greater importance on more immediate financial concerns, potentially resulting in financial hardship in the long-term, according to new research out from HSBC.
The global study finds that for 81 percent of working-age Americans, saving for retirement is not their main priority, even as 76 percent have seen retirement savings impacted at some point by a significant life event such as buying a home, becoming unemployed, divorce or illness, underscoring the power of planning adequately and at an early age for life after work.
This report, entitled The Future of Retirement: A balancing act is based on a survey of more than 16,000 people from 15 countries and territories.
The research discovers that personal debt accumulated earlier in life continues to impact the ability to save for the future. The report also uncovered other reasons for not adequately preparing for retirement:
- Paying off a mortgage or other debts is the biggest barrier (57 percent among Americans; 46 percent globally) preventing working-age people from saving adequately for life after work. Americans are more preoccupied with paying off other debts (51 percent) and a mortgage (25 percent) than most other countries.
- Three in 10 (29 percent) retirees worldwide who did not prepare adequately for a comfortable retirement admit they did not know how much they needed to save. This number rises in the U.S. where 41 percent say they did not possess the proper knowledge.
- Those who begin retirement planning when they are older than 30 have waited too long, say more than a third (38 percent) of the world’s retirees. More retirees in the U.S. (47 percent), U.K. (62 percent), Australia (57 percent) and Canada (45 percent) recognize the need to start planning by 30 in order to maintain a similar standard of living after work.
Working-age Americans outpace the rest of the world when it comes to planning for later life, as 75 percent report saving for retirement compared to the international average of 62 percent.