Employees in Developed & Developing Economies Disagree Over Retirement Expectations & the Need to Work Longer, Towers Watson ...
10 September 2014 - 3:05PM
Business Wire
Survey reveals confidence declines 25 years into retirement
for most economies
Retirement security has become an increasingly important issue
for employees around the world. However, when it comes to
retirement expectations or how long they need to work to afford a
comfortable retirement, the views of employees in developing and
developed economies differ greatly, according to a survey by global
professional services company Towers Watson (NYSE, NASDAQ: TW).
The Towers Watson Global Benefit Attitudes Survey, a survey of
more than 22,000 employees in 12 economies, found in developing
economies including Brazil, Chile, China, India and Mexico, between
two-thirds and three-fourths of respondents expect economic
progress to usher in continually improving standards of living in
retirement. Conversely, in developed economies (Australia, Canada,
Germany, Japan, the Netherlands, the U.K. and the U.S.), only 20%
to 40% of workers expect to enjoy the same or better standards of
living in retirement than earlier generations.
The survey also found that in most economies, a majority of
employees are confident of being able to afford 15 years of
retirement. But confidence declines substantially when
employees are asked to look further into the future. In
developed economies, typically two-thirds of respondents believe
their financial resources will support 15 years of retirement, but
less than half are confident when considering 25 years into
retirement.
“Despite improving corporate financial performance in developed
economies and more benign economic conditions in developing
economies, large numbers of employees have undergone considerable
change and uncertainty in the workplace,” said David Speier, senior
consultant at Towers Watson. “As a result, many workers have become
more insecure about their jobs and finances. Most employees
globally believe they are behind schedule on saving and find it
difficult to catch up because they may not have the financial means
to do more in this environment. It’s no wonder that retirement
security has taken on heightened importance for employees
worldwide, with the majority in all economies recognizing the need
to save more, both generally and specifically for retirement.”
Changing Views on When to Retire
In most of the developed economies, one-third to nearly one-half
of respondents have decided to extend their working years, often
substantially. The average increase is five years in Australia
and the U.S.; four years in Canada, Japan and the U.K.; and three
years in Germany and the Netherlands. As a result, the average
anticipated retirement age is now over 65 in Australia, the
Netherlands, the U.K. and the U.S. On the other hand, in developing
economies, 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,” said John
Ball, senior consultant at Towers Watson.
Other key findings from the survey include:
- Around the globe, between 40% and 80%
of employees are worried about their current and future financial
situation, with the greatest concern among employees in Chile,
Mexico and Brazil.
- Between 70% and 80% of respondents
acknowledge the need to save more in general. Between half and
three-quarters of respondents say they will need to save much more
to achieve a comfortable level of income in retirement.
About the Survey
Towers Watson’s Global Benefit Attitudes Survey examines
employees’ attitudes toward their health and retirement benefits.
Conducted in 12 economies between June and September 2013, the
survey was completed by 22,347 employees representing all job
levels and major industry sectors. Results are weighted by age,
gender and household income to the national average of workers. The
margin of error for the total sample is ±1.4%.
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global
professional services company that helps organizations improve
performance through effective people, risk and financial
management. The company offers consulting, technology and solutions
in the areas of benefits, talent management, rewards, and risk and
capital management. Towers Watson has more than 14,000 associates
around the world and is located on the web at towerswatson.com.
Towers WatsonMedia Contacts:Ed Emerman, +1 609 275
5162eemerman@eaglepr.comorBinoli Savani, +1 703 258
7648binoli.savani@towerswatson.com
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