Seven out of 10 fear retirement poverty

Oct 20 2006 by Nic Paton Print This Article

Seven out of 10 workers aged more than 45 in the U.S and UK are worried about not having enough money to fund their retirement, a new survey has suggested.

But their concerns pale in comparison compared with workers in Japan, where a massive nine out of 10 of over-45s are concerned about a surviving financially in retirement, with six out of 10 extremely or very concerned.

The study by Hartford Financial Services Group found one in three older workers in the U.S and UK was either "extremely" or "very" concerned.

"When it comes to retirement planning, many people living in the world's most advanced economies struggle with preparing for retirement," said Liz Zlatkus, president of HFS's international wealth management and group benefits.

"There is a tremendous need for education about retirement planning in the U.S, U.K. and Japan to enable consumers to take more personal responsibility for ensuring their financial security," she added.

Concerns about having enough money in retirement have led many people to conclude they need a source of guaranteed income while retired.

Three quarters of the Japanese workers polled rated a source of guaranteed income in retirement as extremely or very important, compared with nearly six out of 10 of those in the U.S and half of those in the U.K.

"With increasing financial pressures on both public and private pension systems, the days of retirees being able to count on a robust, guaranteed income from the government or their employer are waning," Zlatkus said.

There was also an underlying anxiety about sources of retirement income on which respondents in each country said they planned to rely.

Many expected they would not live as well as their parents in retirement. In the U.S and UK, a quarter said they were afraid they would lack the resources to retire as comfortably as their parents. But in Japan, more than four out of 10 had similar concerns.

Few people were confident all of their sources of retirement income, even when combined, would be sufficient.

Three quarters of Japanese said they were less than confident compared with almost half of Britons and one in three Americans.

Unsurprisingly, many people - around one in four Japanese and a third of Britons and Americans - said that the prospect of running out of money in retirement would prompt them to work longer and delay retirement, or work part time during retirement.

More than half of those polled in the U.S ranked the government-sponsored pension as the most important or second most important source of retirement income.

Yet half also doubted that social security would provide sufficient income to maintain their standard of living in retirement.

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