Depending on where in the world they live, workers have very different views on retirement — not just on when to retire and what to expect during retirement, but how many years they can finance with retirement savings.
So says the Towers Watson Global Benefit Attitudes Survey, a survey of more than 22,000 employees in 12 economies. Responses revealed, as might be expected after years of global financial turmoil, that a large percentage of employees, no matter where they live, are pessimistic about their financial situations. Between 40-80 percent are uneasy not just about their financial futures, but also about their current finances, with those in Brazil, Chile and Mexico the most concerned.
But retirement is the big issue here, with only 20-40 percent of employees in the developed economies of Australia, Canada, Germany, Japan, the Netherlands, the U.K. and the U.S. expecting that they will experience the same or better standards of living in retirement than earlier generations.
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Those in developing economies have a different and more optimistic outlook on that score. Between two-thirds and three-fourths of employees in such economies, including Brazil, Chile, China, India and Mexico, expect economic progress to bring with it continually improving standards of living in retirement.
In most places, the survey found that the majority feel fairly confident that they can afford 15 years of retirement. But more than that? Not so much. The gap is prominent in developed economies, where two-thirds say that they can manage 15 years but are not so sanguine about their chances 25 years into retirement.
A third to a half of employees in most of the developed economies have decided to delay retirement, often by a substantial number of years. In the U.S. and Australia, the average increase is five years; in Canada, Japan and the U.K., four; and three years in Germany and the Netherlands. That's brought the average anticipated retirement age in Australia, the Netherlands, the U.K. and the U.S. to over 65.
In developing economies, however, most workers haven't changed their anticipated retirement age over the past three years. And of those who changed their minds, more expect to retire sooner rather than later.
"The expectation of longer careers in developed economies partly reflects longer life expectancy and governmental pension reforms that have increased the retirement age. However, the transition from defined benefit (DB) to defined contribution (DC) retirement plans also appears to be playing a significant role. Developed economies with older retirement ages tend to be further along in the transition from DB to DC only," John Ball, senior consultant at Towers Watson, said in a statement.
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