USA Report

The Future of RetirementA new reality

Contents Foreword3 Foreword by HSBC

4 Introduction

5 Key findings

6 Part One: Getting the retirement you want

• Retirementhopesandfears

• Howmuchmoneywillbeneededin retirementandwherewillitcomefrom?

9 Part Two: The obstacles to saving

• Whyarepeoplenotsavingforretirement?

• Short-termisminsavingsbehaviour

12 Part Three: The role of saving and planning

• Whendoretirementsavingand planningbegin

• Thedriversofretirementsaving andplanning

• Howpeoplemakefinancialplans forretirement

• Theplanningpremium

17 Practical actions towards a more comfortable future

WelcometothelatestFutureofRetirementreport,A new reality,researchedexclusively forHSBC.

Overtheyearswehavebeenconductingthissurvey,wehavespokento

over110,000peopleabouthowtheyvisualisetheirretirement;whatthey

planforandwhattheywantfromtheyearsaftertheystopworking.We

believethatthisgivesusuniqueinsightintochangingviewsandpriorities

acrosstheworld.

Thisyearwehavetalkedto15,000peoplein15countries.Thesurvey

findingsaretherealreflectionsofpeopleintheUSAandacrosstheworld,

andthisyearinparticularhaveillustratedtheveryrealawarenessthatpeople

haveofthenewglobally-connectedworldinwhichwelive,andtherealism

withwhichpeoplearefacingafutureoffinancialchallenges.

AtHSBC,wehelppeopletoplanfinanciallyfortheirfuture,bothtorealise

theirdreamsandtohelpthemprotectagainstthebadtimeswhich

sometimesthreaten.Webelieveit’simportanttounderstandourcustomers’

hopesandfears,andtoprovidethemwithoptionstodevelopeffective

financialplansfortheirfuture.

Thisreportletsyouseeforyourselfwhatothersthinkandfeelabouttheir

retirement.Ihopeitwillalsoencouragesomereaderstotakesomesmall

stepstowardspreparingtheirfinancesforthefuture–andforthereality

tomeetexpectations.

Andrew Ireland

HeadofWealthManagement&PremierBanking

HSBCSecurities(USA)Inc.

3

PartTwo

The obstacles to saving

The2013globalreport,Anewreality,

istheeighthintheseriesandisbased

onasurveyofmorethan15,000

peoplein15countriesinJuly&

August2012.Afurtherreportlooking

athowpeoplearelivinginretirement

willbepublishedlaterintheyear.

Thiscountryreport,basedonthe

viewsofover1,000respondentsin

theUS,highlightsourmainfindings

intowhatpeoplearelookingforward

tofromtheirretirementandhow

theyareexpectingtopayforthese

aspirations.Thefirstparthighlights

people’shopesandfearsfor

retirement.Thesecondpartexplores

savingsbehavioursandwhatfactors

encourageanddiscouragesaving.

Thethirdpartfocusesonhowpeople

arecurrentlysavingandplanningfor

retirement,andwhethertheyare

doingenough.Thefinalpartlistssome

practicalactionsthatpeoplecantake

toimprovetheirfinancialwell-beingin

laterlife.

Theglobalreport,othercountryreports

andallpreviousreportsareavailableon

www.hsbc.com/retirement

IntroductionHSBC’sTheFutureofRetirementprogramme isaworld-leadingindependentstudyintoglobalretirementtrends.Itprovidesauthoritativeinsightsintothekeyissuesassociatedwithageingpopulationsandincreasinglifeexpectancyaroundtheworld. • Over half (55%) of US

respondents think their retirement preparations are inadequate: 20% are not preparing at all, while 36% say they are not doing enough.

• People run the risk of living long beyond their retirement savings: on average US respondents expect their retirement to last for 21 years, but their retirement savings to last for only fourteen years.

• The average US respondent believes that 19% of their retirement income will come from the state, 18% will come from cash savings and a further 18% will come from other investments (e.g. bonds, endowments). Overall, 44% expect the state pension to contribute to their living in retirement. Given that US respondents want a retirement income that replaces three-quarters (75%) of their working

life income, there is an overreliance on dwindling state benefits.

• Respondents understand the importance of preparing for retirement from early on in life: on average, they see the age of 36 as the latest by which people can start planning financially and still expect to maintain their standard of living in retirement.

• When asked to choose between saving for the short-term goal of a holiday and the longer term goal of retirement, US respondents prioritise saving for retirement over saving for a holiday more than in any other country surveyed outside the Asia-Pacific region. When asked if they could only afford to save for one of these options for a whole year, 38% chose a holiday, whilst 49% chose retirement.

• Employer-led initiatives are an important incentive to retirement saving: 34% of US respondents started planning financially for retirement after their employer paid into a pension for them. However, greater numbers save because it is regarded as the right or responsible thing to do (49%).

• In the USA, there is a strong relationship between financial planning and saving more. For example, men who plan formally for retirement have over one-quarter more savings than those who plan informally, and nearly three times more than those who have not planned at all. Those who use professional advice are also better off:- they typically have over twice the retirement savings of those who have not used such advice.

Key findings

Familyandtravelarethemostimportantaspirationsforretirement

4 54 5

Tounderstandretirementsavings

needsintheUSA,thereisaneedto

understandpeople’saspirationsfor

laterlife.Themostpopularretirement

aspirationisthedesiretospendmore

timewithfamilyandfriends(59%),

whilealsodesirableistheabilityto

travel(49%)andtotakefrequent

holidays(40%).

PartOne

Getting the retirement you want

Respondentswereaskedhow

muchmoneytheyfeeltheywill

needtolivecomfortably,bothnow

andinretirement.Usingthese

figures,thefindingsshowthatthe

proportionof‘workingage’income

respondentsbelievetheyneedfor

acomfortableretirementis75%.

Inordertoachievetheseincome

aspirationsforlaterlife,itisclear

thatsavingsbehaviourintheUSA

willhavetochange,especially

as36%ofrespondentsarenot

adequatelypreparingforretirement,

andone-fifth(20%)arenotpreparing

atall.

Tofurtherrevealtheinadequacyof

currentsavingslevels,respondents

wereaskednotonlyhowlongthey

expectedtoliveinretirement,but

alsohowlongtheyexpectedtheir

savingstolast.Thefindingsreveal

thatonaverageUSrespondents

expecttheirretirementtolastfor21

years,buttheirretirementsavingsto

lastforjustfourteenyears.

Respondentswerealsoquestioned

abouttheirfearsaroundretirement.

Themostcommonconcernswere

financialhardship(58%),nothaving

enoughmoneyforgoodhealthcare

(48%)andpoorhealthgenerally

(45%).Moreover,40%fearedhaving

toworklongerthantheywanted

to.Takentogether,thesefindings

suggestmanyarerightlyworried

aboutthegrowingproblemofpaying

forhealthcareandlongtermcarein

retirement.

Retirementhopesandfears

Howmuchmoneywillbeneededinretirement andwherewillitcomefrom?

Figure1:Spendingtimewithfamilyandfriendsandtravellingarekeyretirementhopes

Q: Many people have specific hopes and aspirations for their retirement. Which, if any, of the following are important

aspirations for you? (Base: All not fully retired)

59%

49%

40%

36%

34%

33%

31%

31%

17%

12%

12%

12%

12%

11%

6%

4%

Spendingmoretimewithfriendsandfamily

Extensivetravel

Frequentholidays

Homeimprovements/gardening

Continuingtoworktosomeextent

Charity/voluntarywork

Learningnewskills/hobby

Takingmoreexercise/playingmoresport

Buyinganewcar/otherexpensiveitem

Livingabroad

Startingabusiness

Writingabook

Furthereducation

Learningaforeignlanguage

Noneofthese

Don’tknow

Figure2:Financialhardship,poorhealthcareprovision,andpoorhealtharemajorretirementfears

Q: Many people also have concerns or fears for their retirement. Which, if any, of the following concerns or fears

do you have? (Base: All not fully retired)

58%

48%

45%

40%

30%

29%

25%

19%

19%

14%

6%

5%

2%

Financialhardship

Nothavingenoughmoneyforgoodhealthcareprovision

Poorhealth

HavingtoworkforlongerthanIwantto

Lossofmemory

Notbeingabletorealisemyhopesandaspirations

Boredom

Loneliness

Notbeingabletowork

Themovefrom‘active’to‘passive’retirement

Discrimination

Noneofthese

Don’tknow

29%

36%

20%

4% 11% 75% :Peopleneedthreequartersofcurrentincometostaycomfortableinretirement

Financialhardship andpoorhealtharethebiggestretirementfears

Figure3:Themajorityarenotpreparing

adequatelyoratallforretirement

Q: Overall, financially do you think

that you are preparing adequately

for a comfortable retirement?

(Base: All not fully retired)

No,Iamnotpreparingatall

No,Iamnotpreparing adequately

Yes,Iampreparingaboutadequately

Yes,Iampreparingmorethanadequately

Don’tknow

76

24%

16%

13%

3%

14%

4%

14%

24%

13%

14%

4%

20%

4%

15%

19%

20%

12%

5%

14%

6%

17%

15%

19%

15%

4%

15%

4%

21%

19%

18%

14%

4%

16%

5%

18%

Figure4:Savingsand

investmentswillformalarge

partofretirementincome

Q: Once you are fully retired,

what proportion of your

retirement income do you

expect will be funded from

each of the following sources?

(Base: All not fully retired)

Statepension(s)/benefits

Investments,e.g.bonds,endowments,shares, unittrusts,mutualfunds

Cashsavings/deposits

Companypension(s)

Personalpensions(s)

Propertyincomeandassets,e.g.rentingout, equityrelease,‘downsizing’,sale

Inheritance

Othersources,e.g.windfall

Sellingabusiness

Financialsupportfromfamilyand/orfriends

Lottery

All 25-34 35-44 45-54 55-64

PartTwo

The obstacles to saving

56%

17%

14%

13%

11%

9%

8%

6%

6%

5%

5%

3%

4%

2%

5%

9%

Figure6:Non-saversareputoffretirementsavingduetothecostofday-to-dayliving

Q: Why have you never saved specifically for retirement? (Base: All who have never saved for retirement)

Respondentssaythattheywillneed

ahouseholdincomeof$60,100a

yeartofeelcomfortableinretirement.

AlthoughUSrespondentsrightly

recognisetheimportanceofsavings

andinvestmentsinfundingtheir

retirement,nearlyone-fifthofincome

isstillexpectedtocomefromstate

pensionsandbenefits.Figure5

reinforcesthispoint,showingthat

44%seethestateasanimportant

sourceofretirementincome.

Only49%ofUSrespondentsare

regularsavers.Ofthosewhohave

neversavedforretirement,overhalf

(56%)arebeingheldbackbythe

costofday-todayliving,risingto70%

of45-54yearolds.Nevertheless,

respondentsseemtounderstandthe

importanceofpreparingforretirement

fromearlyoninlifeandonaveragesee

theageof36asthelatestbywhich

peoplecanstartplanningfinancially

andstillexpecttomaintaintheir

standardoflivinginretirement.

Figure5:Thestatewillbeanimportantsourceofretirementincomefornearlyhalfofrespondents

Q: Thinking again about the way you envisage funding your own retirement, which of the following means do you think will

contribute towards your living in retirement? (Base: All not fully retired)

48%

44%

27%

26%

24%

23%

21%

20%

15%

13%

13%

12%

10%

10%

9%

6%

6%

5%

3%

2%

3%

3%

2%

14%

Cashsavings/depositaccounts

Statepension/socialsecurity

Definedcontributionpensionscheme

Mutualfunds/unittrustsandinvestments

Spouse/partner’sincome

Stocksandshares

Definedbenefitpensionscheme

Personalpensionscheme

Incomefromproperty‘downsizing’/sale/rental

Inheritance

Lifeinsurance

Annuities

Otheremployerpensionscheme

Employersavings/sharescheme

Othersavings/investmentproducts

Long-termcareinsurance

Investment-linkedinsurances

Sellingabusiness

Otherfinancialwindfall

Financialsupportfrommychildren

Offshoretrusts/deposits

Foreigncurrency

Other

Don’tknow

Allmymoneygoesintolivingday-to-day

Theeconomicclimatehasbeentoounstable

I’veneverreallythoughtaboutit

I’msaving/investinginadifferentway

Myemployerdoesn’t/didn’tofferapensionscheme

Mypartner’spension/savingswillprovidesufficientincome

RetirementistooFARawayformetostartsaving

Ihaveotherpensionarrangementsinplace

Ihaveneverworkedfull-time

Idon’ttrustfinancialservicescompanies

Myemployer’spension(s)are/weresufficientformyretirement

RetirementistooCLOSEformetostartsaving

Idon’tunderstandsavingsandinvestments

TheStatewillprovidesufficientincome

Otherreason

Dont’know

Whyarepeoplenotsavingforretirement?

31%havenever savedspecifically forretirement

21 vs. 14Peopleexpecttospend21yearsinretirement,buttheirsavingstorunoutafter14years

98

Figure7showsthattherearesome

lifeeventsthatcanderailpeople’s

effortstosaveforretirement.The

mostimportantofthesehasbeen

thecurrenteconomicdownturn

(34%),followedbybuyingahome/

payingamortgage(29%)

Lifeeventscanhaveadamaging

impactonretirementpreparation:

74%ofthoseaffectedbyatleastone

oftheeventsinFigure7saidthey

savedlessforretirementasaresult.

IntheUSA,themostimpactfullife

eventsaffectpeople’sretirement

savingsbehaviouronaverageforfour

years,inlinewiththeglobalaverage.

Importantly,nearlythree-quarters

(70%)ofthosewhoseabilitytosave

forretirementwaseverimpactedby

alifeeventsaytheyarestillbeing

affectedbytheconsequences.

Anotherobstacletoretirementsaving

isthetendencytofocusontheshort-

term:immediatesavingsneedsare

moretangibleandthereforemaybe

givenahigherprioritythanfar-offgoals

likeretirement.Respondentswere

askedtochoosewhethertheywould

savetowardsaholidayorretirement,

iftheycouldonlyaffordtosaveforone

inasingleyear.Encouragingly,only

38%chosetheshorttermgoalofa

holidaywhereas49%chosetosavefor

retirement(seeFigure8).Nevertheless,

thisstillsuggeststhatformany,short-

termfinancialneedstakeprecedence

overlongertermfinancialpriorities,

althoughUSrespondentsgenerally

takealongertermviewthanthose

inothercountriesoutsidetheAsia

Pacificregion.

However,USrespondentsarewilling

todigintotheirretirementsavingsas

ameansofdealingfinanciallywithan

unforeseencrisis.AsFigure9shows,

27%wouldlooktotheirretirement

savingstogetthroughseriousfinancial

hardship,althoughtheyprefertoturn

totheirothersavings(40%).Afurther

23%wouldselltheirvaluables.Taken

together,thismeansthatwhilstputting

longertermgoalsfirstmayboost

contributionstoretirementsavings,the

readinesstodrawonlong-termsavings

inanunexpectedcrisiswillactto

reducethevalueofretirementsavings

forsomerespondentsintheUSA.

Figure7:Morethananyotherlifeevent,theeconomicdownturnhasaffectedretirementsavings

Q: Some people experience ‘life events’ which impact significantly on their ability to continue saving for their retirement.

Which, if any, of the following ‘life events’ have EVER impacted significantly on your own ability to save for retirement, and

which one has impacted you the most? (Base: All not fully retired)

Figure8:RespondentsintheUSAwouldrathersaveforretirementthanforaholiday

Q: If for one year you could only afford to save EITHER to go on holiday OR towards

your retirement, which would you be more likely to do? (Base: All not fully retired)

Figure9:27%wouldusetheirretirementsavingstodealwithacrisis

Q: Sometimes people experience unforeseen life events which can lead to serious

financial hardship. If you were to experience such hardship which, if any, of the

following actions would you be most likely to consider? (Base: All not fully retired)

Therecession/currenteconomicdownturn

Buyingahome/payingamortgage

Becomingunemployed

Gettingintodebt/severefinancialdifficulty

Significantdropinearnings/paycut

Startingafamily

Payingformyowneducation

Payingforchildren’seducation

Illnessoraccidentpreventingme/myspouseworking

Havingtofund/payforadependent

Separation/divorce

Gettingmarried/civilpartnership

Finishingfull-timeeducation

Havingtostopworktolookaftersomeone

Startingwork

Remarrying

Otherevent

Noneoftheseeventshavesignificantlyimpacted

Don’tknow Usemyothersavings&investments

Usemyretirementsavings&investments

Sellmyvaluables

Lookforbetter-paidwork

Moveintoasmallerhome

Askfriendsandfamilyforhelp

Borrow(more)money

Sellmymainhome

Usemyinsurance(s)

Sellmysecondhome/otherproperty

Sellmybusiness/businessassets

Otheraction

Don’tknow

34%

29%

28%

26%

20%

18%

16%

15%

13%

13%

10%

9%

9%

6%

6%

4%

3%

16%

6% 40%

27%

23%

22%

21%

17%

14%

12%

9%

7%

3%

5%

13%

34%saytheeconomicdownturnhasaffectedtheirabilitytosaveforretirement

Short-termisminsavingsbehaviour

Savetogoonholiday Savetowardsretirement

All

France

UK

USA

Canada

Brazil

Mexico

UAE

Egypt

HongKong

India

Malaysia

China

Taiwan

Singapore

Australia

1110

37%

26%

25%

22%

20%

19%

18%

16%

13%

11%

11%

10%

7%

6%

6%

4%

4%

15%

6%

48%

28%

24%

19%

18%

18%

17%

16%

14%

13%

13%

12%

12%

10%

9%

9%

9%

9%

8%

6%

6%

5%

2%

7%

6%

26

25

30

26

27

24

25

28

30

28

29

28

29

26

25

26

30

25

30

28

30

30

26

30

30

29

30

30

30

28

27

30

Thefindingsshowthatsaving

(puttingmoneyasideforthefuture)

andfinancialplanning(evaluatingthe

currentsituation,identifyingfuture

goalsandtakingactiontoachieve

them)startatvaryinganddifferent

agesinthecountrieswesurveyed.

Onaverageworldwide,retirement

savingstartsfouryearsbefore

planningforretirementstarts.Inthe

USAthe‘gap’istypicallytwoyears.

AlthoughUSrespondentstypically

planslightlyearlierthanthosein

mostothercountriessurveyed,the

averagefigurehidesthefactthat

31%ofUSrespondentshavenever

savedforretirement,including32%

of55-64yearolds.

Figure11showstherearemany

differentreasonswhypeoplebegin

tosaveforretirement,thoughfearof

financialhardshipinretirementis

byfarthemostcommonmotivator,

chosenbynearlyhalf(48%)of

allrespondents.Morepositive

developmentssuchasstarting

work(24%),apromotion(14%)or

gettingoutofdebt(17%)arefarless

importanttriggers.

PartThree

The role of saving and planningWhendoretirementsavingandplanningbegin?

Thedriversofretirementsavingandplanning

Figure10:PlanningforretirementbeginsslightlyearlierintheUSAthanthe

globalaverage

Q: At what age did you first start to save specifically for retirement? At what age

did you first start planning financially for retirement? (Base: All not fully retired,

chart shows medians and excludes those who have not started saving or planning)

Age(years)startedsavingforretirement Age(years)startedplanningforretirement

All

UK

France

USA

Canada

Mexico

Brazil

Egypt

UAE

India

China

HongKong

Taiwan

Singapore

Malaysia

Australia

All

UK

France

USA

Canada

Mexico

Brazil

Egypt

UAE

India

China

HongKong

Taiwan

Singapore

Malaysia

Australia

Figure11:Fearoffinancialshortfalls

inretirementismotivatingsaving

Q: There are many reasons why

people start saving for retirement.

Which of the following are the main

reasons why you started or would

start saving for retirement?

(Base: All respondents)

Fearofnothavingenoughintoliveoninlaterlife

It’swhatpeopledo

Startingwork

Advicefromfriendsandfamily

Runninigoutoftimetoplanforretirement

Qualifyingforacompanypensionscheme

Payingoffotherdebts

Advicefromaprofessionalfinancialadviser

Gettingapromotionorpayincrease

Startingafamily

Newsstoriesaboutlowincomesinretirement

Taxefficiencies

Seeingmyretiredparents’standardofliving/qualityoflifeislowerthanIwant

Finishingfull-timeeducation

Buyingahome

Payingthemortgageoff

Theeconomyrecovering

Gettingmarried/civilpartnership

Governmentadviceabouttheneedtosaveforretirement

Aperiodofillnessorinjury

GovernmentcuttingtheStatepension

Childrenleavinghome

Remarrying

Otherreason

Don’tknow

55%arenotpreparingadequatelyoratallforacomfortableretirement

12 13

AsFigure13shows,financial

planningforretirementcantake

severalforms.Ourresearchlooksat

whatfinancialplanningmeans

todifferentpeople.Themost

commonmethodsofretirement

financialplanningareinformalsuch

aspeople’sownthoughts(41%)

andpeople’sownapproximate

calculations(29%),whilst15%have

notundertakenanyformoffinancial

planningatall.

Employercontributionshave

traditionallybeenanimportantpartof

retirementplanningintheUSA,and

Figure12showsthatthisremains

thecase.Thesefindingsshowpaying

intoanemployee’spensioncanhave

positiveeffectsbeyondtheobvious

contributiontowardsretirement

income:for34%,itwasanincentive

tobeginplanningforretirement.

Elsewhere,therealisationthatthe

statepensionisnotadequateis

anotherdriverofplanningbehaviour,

with25%sayingitwasthereason

theybeganretirementplanning.

Nevertheless,justunderhalf(49%)

simplyrecognisethatplanning

financiallyforretirementistheright

orresponsiblethingstodo.

Theresearchlooksattherelationship

betweenfinancialplanningandsaving

money.Globally,thereisapositive

relationshipoverall–the‘planning

premium’–with44%ofrespondents

savingmoreforretirementasa

resultofhavingafinancialplan,

comparedwithonly31%whodid

notsavemore.Thisrelationshipis

evenstrongerintheUSA,where

morerespondents(49%)sayfinancial

planningledtoincreasedsavingfor

retirement,whilstonly27%saythey

didnotsavemore.

Howeveroncloserexamination,the

researchfindingsrevealsomefurther

insightsbehindthisheadline.Ofthose

whousedaprofessionalfinancial

adviserforplanning,61%savedmore

forretirementasaresult.Andof

thosewhoconsultedaprofessional

financialadvisertodevelopawritten

financialplan,72%savedmorefor

retirement.Self-directedplanning

appearslesshelpful:48%ofthose

whoreliedontheirownthoughtsand

actionssavedmoreforretirement.

IntheUSA,theplanningpremium

isstrongestamongstthosenearing

retirement:amongst55-64yearolds,

53%sayfinancialplanninghasledto

themsavingmoreforretirement.

Thisdirectrelationshipbetween

financialplanningandgreatersavings

isnotjustacorrelation,itisacause

andeffect:manyrespondentssay

thathavingafinancialplanningled

themtosavemoreforretirement.In

theUSA,menwhoplanformallyfor

theirretirementhaveonaverageover

one-quartermoresavingsthanthose

planninginformally,andnearlythree

timesmorethanthosewhohavenot

planned.Menwhouseprofessional

advicearebetteroffstill,andhave

onaverageovertwicetheretirement

savingsofthosewhohavenotused

suchadvice.

Figure12:Employerpensioncontributionsprovideaspurtoretirementplanning

Q: What are the main reasons why you started planning financially for your retirement? (Base: All respondents excluding those

who have not planned financially for retirement)

Figure13:Retirementplanningislargelyself-directed

Q: Planning financially for retirement can take several forms, both formal and informal. In which of the following ways, if any,

have you ever planned for your retirement? (Base: All respondents, chart does not show those who have not planned

for retirement)

Figure14:Halfofrespondents

believefinancialplanninghas

boostedtheirsavings,andthose

whodosohavesavedmore

Q: As a result of having a financial

plan in place, would you say

you have saved more for your

retirement and for other purposes?

(Base: All respondents excluding

those who have not planned

financially for retirement)

Retirementsaving Othersaving

It’stheright/responsiblethingtodo

Iwant/wantedagoodstandardoflivinginretirement

Myemployerpays/paidintopensionforme

Ican/couldaffordto

Iwant/wantedtorealisemyhopesandaspirationsinretirement

TheStatewillnotprovideanadequateretirement

Iwant/wantedtoretireearly

Iwant/wantedtohavemoreinretirementthanmyparents

Advicefromaprofessionalfinancialadviser

Myspouse/partnersuggestedthatIstartplanning

Specificlifeevent,e.g.gettingmarried,startingafamily

Ireceivedapayrise

Otherreason

Don’tknow/can’trecall

Myownthoughts

Myownapproximatecalculations

Myown‘todo’list

Conversations/meetingswithaprofessionalfinancialadviser

Advice/plandrawnupbyHR/Benefits/Pensionteamatwork

Onlineself-directedplanningsolutions/tools

Writtenplanroutinelyreviewedwithaprofessionalfinancialadviser

‘One-off’writtenplanfromaprofessionalfinancialadviser

Other

Don’tknow/can’trecall

49%

47%

34%

31%

29%

25%

19%

18%

17%

13%

9%

9%

4%

6%

41%

29%

27%

23%

19%

14%

10%

8%

5%

8%

Howpeoplemakefinancialplansforretirement

Theplanningpremium

12%

38%

10%

40%14%

27%

10%

49%

Yes No Don’tknow Notapplicable-Idon’thave

afinancialplaninplace

49%savedmoreforretirementasaresultofhavingafinancialplaninplace

1514 15

Figure15:Financialplanningandadvicehaveapositiveeffectonretirementsavingslevels

Q: Thinking now about the total value of all your retirement savings and investments (including any defined benefit, defined

contribution, personal, or other pensions schemes, including employer contributions), approximately what is the total value of

these savings and investments? (Base: All respondents)

*Income78,001–101,400USD

Retirement savings & investments values (mean)

Respondents who All respondentsAverage income respondents*

Men Women

Used formal retirement planning USD 377,150 USD 371,208 USD 525,708 USD 237,879

Used informal retirement planning

USD 315,698 USD 322,365 USD 409,321 USD 203,015

Did not use any retirement planning

USD 84,312 (N/A – Sample size too low)

USD 187,601 USD 19,988

Used a professional financial adviser

USD 444,403 USD 387,614 USD 642,436 USD 260,444

Did not use a professional financial adviser

USD 205,537 USD 245,952 USD 289,579 USD 122,877

All respondents USD 280,732 USD 299,011 USD 398,446 USD 167,016

Practical actions towards a more comfortable futureHerearesomepracticalstepspeoplecantaketoimprovetheirfinancialwell-beinginlaterlife,basedonourkeyglobalresearchfindings:

Action1:Get real about your retirement needs

Globally, respondents believe their savings will run

out on average halfway through their retirement.

Withlifeexpectancyincreasing,peopleneedtobe

awarehowlongtheirmoneywillhavetolast,sothat

theycantakestepstoavoidanyshortfall.

Action2:Put your savings priorities in order

Globally, 22% are not currently saving anything for

retirement, whilst 43% would choose saving for a

holiday over saving for retirement if they could only

afford to do one for a year.

Aproperbalanceneedstobeestablishedbetween

spendingonshort-termneedsandsavingforlonger-term

goalssuchasretirement.Shiftingprioritiesnowtowards

longer-termsavingcanleadtoamoreprosperousfuture.

Action4:Plan for the future

There is a direct link between having a financial plan

and saving more: globally, 44% say they saved more for

retirement with a financial plan in place, whilst only 31%

say they did not save more.

Havingafinancialplanandjustsavingsomething,

howeversmalltostartwith,canmakeabigdifference

toretirementincomeinthelongrun.

Action3:Be aware of how major life events affect saving for retirement

Life events, such as starting a family, impact on

retirement saving behaviour for an average of four years.

Asmostpeoplewillbeaffectedbytheseeventsat

somepointintheirlives,itisimportanttopreparein

advancetominimisethedetrimentalimpactontheir

retirementsavings.

Action5:Use professional advice to improve your savings position

Looking at respondents with average incomes, those

who use professional advice when planning their future

have the greatest levels of retirement and other savings.

Developingafinancialplanwithaprofessionaladviser

canhelpensurethatallretirementneedsareidentified,

gapsavoided,andeventualitiescovered.

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Excerptsfromthisreportmaybeusedorquoted,providedtheyareaccompaniedbythefollowingattribution:‘ReproducedwithpermissionfromTheFutureofRetirement,publishedin2013 byHSBCInsuranceHoldingsLimited,London.’

PublishedbyHSBCInsuranceHoldingsLimited,London

DesignedandproducedbyGlobalPublishingServices

www.hsbc.com/retirement

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