BackMoney worries hinder retirement: report
45-plus working population who want to retire are unable to due to financial constraints, found a study
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Financial concerns are the biggest roadblocks on the path of retirement for many Indians. According to an HSBC report, The Future of Retirement: Healthy New Beginnings, 61% of the Indian respondents in the study who are working and are aged 45-plus, want to retire in the next five years. But 14% of them believe they will be unable to do so, and most of them (71%) cite financial difficulties as the reason. This reiterates the need for Indians to begin saving early and planning well for retirement.
Findings are based on a survey of 18,000 people across 17 countries of working age (25-plus) and in retirement. The research was conducted online in September and October 2015. In India, 1,011 people participated.
The study also found that of the 45-plus working population who would like to retire but are unable to due to financial constraints, 53% said this is due to not having saved enough, 42% said it was because they have dependants who rely on their income and 17% cannot retire as they have a lot of debt.
Money worries
High financial pressures may also mean not being able to retire at all—18% of pre-retirees worldwide predicted that they will never be able to retire fully due to money concerns. This is almost twice the proportion that said the same in 2015, when 10% of pre-retirees expected never to be able to afford to fully retire.
The study also found that among Indian respondents, 43% would like to retire in the next five years to spend more time with their family. Others want to travel and pursue other interests (34%) or pursue another career or voluntary work (20%).
Concerns about being able to save for retirement were mostly based on healthcare. About 40% of pre-retirees said poor health would make saving for retirement more difficult.
The top life events that people expect to hinder retirement were poor health (40%), buying a house (39%), partner becoming ill (32%), sending children to university (31%) and sending them to school (26%). And among the retired respondents, 43% said purchasing a house was a barrier.
Optimism levels
After retirement, more than half the participants thought that their social life (57%) and standard of living (56%) would improve. This may play out as expected as the retirees who participated in the study gave similar replies—59% said their standard of living had improved and 58% said their social lives were better. The optimism continues to people’s expectations for overall financial and health conditions. Among the pre-retirees, more than half (54%) expect financial situation to be better after retirement, and 45% expect their health to improve. But age plays a role here. For instance, while 57% of those who were in the 25-34 years age group said they are optimistic of the money situation after retirement, the optimism waned in older age groups—51% for the 45-54 year age group and a lower 45% in the 55-64 year group.
Edited excerpts from HSBC’s report, The Future of Retirement: Healthy New Beginnings.
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