Concerns Over Finances in Retirement Are Worldwide, Survey Finds

When it comes to having sufficient funds during retirement, expectations are low and fears rife everywhere, according to a recent study. In “The Changing Face of Retirement: The Aegon Retirement Readiness Survey 2014,” the Transamerica Center for Retirement Studies and Aegon polled 16,000 employees in 15 counties in North and South America, Europe and Asia and found that while a growing number of respondents expect their finances — and their countries’ economies — to improve in the short term, that optimism does not translate to confidence about the more distant future. 

The good news is that 34 percent of respondents are pessimistic about their finances during retirement, but that is mitigated by the more sobering finding that just 19 percent are very or extremely confident that they will have a comfortable retirement. Employees in France and Poland who have that view are especially few and far between (6 percent and 4 percent, respectively). And a mere 18 percent overall expect to have better retirement years than current retirees do. The study says that employees in North America and Europe are especially apt to expect that their retirements will not be on a par with those of their grandparents or even their parents. 

Despite that pessimism, Americans (along with respondents in China, Brazil and India) were among the most prepared for retirement around the world. Said the Center’s Catherine Collinson in a recent interview with Forbes, “My colleagues on my international project team are in awe of how many Americans are saving for retirement. Americans are much more likely to be saving than in other countries.”

Transamerica and Aegon were not impressed with the retirement readiness respondents evinced, for the most part, finding that 18 percent had a high degree of retirement readiness but 55 percent had a low rating. They believe that “widespread lack of retirement saving and planning” is to blame. And 40 percent said they have no retirement strategy. 

Collinson says that another reason readiness is low is that government tax policies can make retirement saving difficult. She told Forbes that one such example is the requirement that U.S. employees who want to avail themselves of the Saver’s Credit fill out and file the Form 880, the complexity of which she says discourages them to claim the credit. 

John Iekel is Senior Writer and Editor for the ASPPA Net and NTSA Net portals.