The Best (and Worst) Countries For Retirement Planning -Eric McWhinnie

Retirement comes at you pretty fast. If you don’t stop and save once in a while, you could miss it. Saving as early as possible and on a consistent basis is a golden rule in personal finance, no matter where you live. This makes sense considering the price tag associated with a retirement that can last two or more decades. However, workers across the globe struggle with retirement preparedness.
Saving enough money for retirement is easier said than done, regardless of the language. Only 39% of employees globally are habitual savers, meaning they always make sure to save for retirement, according to new research from Transamerica Center for Retirement Studies (TCRS) in collaboration with the Aegon Center for Longevity and Retirement. In fact, a paltry 21% save for retirement occasionally, and 22% are not saving for retirement but intend to do so. Six percent have never saved for retirement and don’t intend to. Making matters worse, respondents expect retirement to last on average 20 years. The study polled 16,000 workers and retirees in 15 countries.
While improved economic activity has slowly lifted retirement readiness sentiment in many countries, the majority still receive low scores, measured by the Aegon Retirement Readiness Index (ARRI). As the chart below shows, working age people in India feel the most prepared for retirement, scoring a 7.0 out of 10 on the ARRI. India is followed by China, Brazil, and surprisingly the United States. However, Australia, The Netherlands, and France all scored below the global average of 5.9. Japan feels the least prepared at 4.8, with Hungary and Spain close behind at 5.1 each.

Source: TCRS

“People are living longer than ever, and are inspiring changes in how we think about working, active living and healthy aging,” said Catherine Collinson, president of TCRS, in a press release. “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.”
How can individual workers prepare for a multi-decade retirement? Placing money aside for retirement on a regular basis is one of the simplest solutions to significantly raise ARRI scores. Over one-third of habitual savers achieved a high index score of at least 8.0, compared to 3% of those who only hold aspirations to save. More importantly, this is a realistic solution to those willing to take control of their money. The average global habitual saver earns about $41,000 annually (equaling $29,000 in emerging markets), which is not much higher than the typical salary in most countries surveyed.

Source: TCRS

Once you commit to saving on a regular basis, having a plan can help keep you on track. Unfortunately, in no survey country are there more than a quarter of people with a written retirement strategy. China, India, Brazil, and the United States are home to the most active retirement planners. In Japan, only 5% of citizens have a written plan, followed by Hungary and Poland at 6% each. Taking the planning process one step further, 56% of Indians and 40% of Americans claim to have a backup plan for expected financial shocks, including savings, spouse’s income, critical illness insurance, and downsizing the home.


Culled from wallstreetcheatsheet