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Throughout the world today, people cling to their retirement goals in the face of ever-increasing pitfalls. Indeed, a majority of individuals we surveyed in South Korea, Taiwan, and the U.S.* are behind in their retirement savings. Upcoming retirees are dealing with a host of short-term needs and familial responsibilities, and doing so with less help from their governments. This new reality has created an unprecedented need for investment savvy on the part of individual consumers.
Short-term financial commitments—like home remodeling, a new car, a child's college tuition, or the care of an aging parent—make up more than 50% of investment goals per country, leaving a large shortfall in retirement savings. Less than one-fifth of survey respondents are very confident that they can afford healthcare, generate an income in retirement, or simply keep from running out of money once retired.
As global life expectancy increases, the potential retirement burden of the "sandwich" generation becomes even greater. Individuals may be financially responsible for not only themselves, but also their children and parents, and perhaps even their grandchildren or grandparents. In fact, more than 80% of Americans and 90% of Koreans expect to be financially responsible for someone else even after they themselves retire.
Universally, consumers are counting on very little help from government programs that are themselves under a tremendous strain from an aging population and declining birthrates. Instead, they are relying more than ever on individual investment programs to meet their retirement needs.
While most consumers understand basic products like traditional savings accounts and work retirement accounts quite well, many other fundamental retirement products are far less familiar to them. Significantly, it is the consumers who indicate a high understanding of products like individual retirement accounts, mutual funds, and estate plans who are much more likely to consider themselves "on track" for retirement.
By contrast, we found approximately half of workers in the U.S. and more than three-quarters in South Korea and Taiwan wished a retirement/financial expert could just tell them what to do.
Read more about Retirement Issues and Perspectives.
Learn more about Individual Retirement Planning.
*Citations:
Retirement Readiness in Taiwan—October 2007
Retirement Readiness in South Korea—March 2008
Roadblocks to Retirement (U.S.)—completed 2005
The Role of Life Insurance in Retirement Planning (U.S.)—completed in October 2007
IFS-A161405 Ed. 02/2009 |
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