Globally, 39 percent of workers are “habitual savers” who say they always make sure that they are saving for retirement, according to new research.
Inspiring a World of Habitual Savers: The Aegon Retirement Readiness Survey 2015 is a survey of 16,000 workers and retirees in 15 countries spanning Europe, the Americas, Asia, and Australia. The survey’s findings create a “call to action to make habitual savings a global trend, recognizing that it should be a shared responsibility among individuals, employers, and policymakers,” according to its authors.
“People are living longer than ever, and are inspiring changes in how we think about working, active living and healthy aging,” Catherine Collinson, president of TCRS, said in a statement. “For many, our retirement will likely last much longer than our childhood. Given this promise of increased longevity, individuals and families need to habitually save, invest, plan, and prepare for a financially secure retirement.”
“While it may seem obvious that people who save consistently over time will likely have a larger nest egg when they retire, it is noteworthy that the retirement preparations of habitual savers transcend simply setting funds aside and include higher degrees of planning and confidence,” Collinson added.
In the United States, the percentage of workers who are habitual savers is even higher. Among U.S. workers, the survey found:
- 52 percent consistently save for retirement, ensuring they always set aside funds.
- 20 percent are “occasional savers” who only save for retirement from time to time
- 12 percent are “past savers” who have previously saved for retirement but are not currently doing so.
- 11 percent are “aspiring savers” who are not saving for retirement though they intend to do so
- 5 percent are “non-savers” who have never saved for retirement and don’t intend to do so
Thirty-six percent of habitual savers globally are very/extremely confident that they will retire with a comfortable lifestyle, more than three times the percentage of aspiring savers (10 percent) who share that same level of confidence. In the U.S. the disparity in confidence is even greater between habitual savers (47 percent) and aspiring savers (nine percent).
Seventy-nine percent of habitual savers globally have some form of retirement strategy, either written or unwritten. In the U.S., 84 percent of habitual savers have some form of strategy compared to just 14 percent of aspiring savers. In addition to a retirement strategy, it is important to have a backup plan if forced into retirement sooner than expected due to unforeseen circumstances such as health issues or job loss. Globally, 48 percent of habitual savers have a backup plan compared to 13 percent of aspiring savers. In the U.S., 54 percent of habitual savers have a backup plan compared to only four percent of aspiring savers.
“Habitual savers are not necessarily limited to the affluent,” said Collinson. “For those who are aspiring to save, they may find that getting into the habit of saving can be within reach.” According to the survey’s findings, habitual savers globally earn approximately $41,000 per year on average. Among habitual savers in the U.S., the average annual income is $73,000. However, it should be noted that globally and in the U.S., habitual savers report having higher incomes than aspiring savers.
“How can we inspire a world of habitual savers?” asks Collinson. Beyond receiving a pay raise, which most aspiring savers say would be helpful, the survey findings illustrate ways employers and policymakers can play important roles in promoting habitual saving.
See Also:
- How Committed Are 401(k) DC Plan Participants To Saving?
- What Advice Do Older Workers Offer Young 401(k) Investors?
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
