Overly pessimistic or unflinchingly realistic? People in Asia are saving the most, but are also more concerned about having enough retirement income.
In completely unsurprising news, people in the Americas are saving the least, and are also the least concerned about retirement income and assets.
Overall, a quarter of people globally are concerned they are not saving enough ahead of retiring, with baby boomers most fearful they are lacking savings, Schroders’ Global Investor Study 2019 has found.
The study—which surveyed over 25,000 investors across 32 locations around the world—found that over a third of baby-boomers were apprehensive about the amount they are saving, compared with 20% of millennials.
Regionally, investors in Asia and Europe were the most concerned that they had not saved enough, with 26% and 25% respectively, nervous about the size of their retirement pots.
This compares with 22% in the Americas.
Safe withdrawal snafu
Despite these misgivings, people on average globally expected to draw 10.3% out of their retirement savings each year and not run out of money, indicating that a mismatch exists between people’s current retirement provisions and what they are expecting to spend in retirement.
Indeed, a quarter of people thought they can take at least 15% each year. Investors in India were, on average, the most confident, expecting to be able to take 15% a year, compared with 7.3% for investors in Japan.
“These findings indicate that a significant mismatch exists between how confident people are with their savings ahead of retiring and the amount they expect to draw upon once they have retired,” Sangita Chawla, Schroders’ Head of Retirement Savings, said in a statement. “This disconnect is worrying and implies that people globally are not being realistic about the lifestyle they want to enjoy when retired.
At a country level, people in Russia were saving the least (11.1%) followed by Spain (11.2%). At the other end of the spectrum were those in Austria and Switzerland saving 21.6% and 21.3% respectively.
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.
