SmartMoney Blogs

A blog about living in and planning for retirement

West vs. East: How Our Views on Retirement Differ


We Westerners fear financial hardship in old age. But Easterners are looking forward to financial independence.

That’s the boiled-down global view of retirement, according to a recent survey of 17,000 people in 17 countries about retirement and financial planning for HSBC Holdings PLC, a U.K.-based bank.

In North America and Europe, people of working age (generally 30 to 60) think that their parents are enjoying a “golden age of retirement which will not be repeated,” the study found. In France, for example, 56% of those surveyed expect to be worse off than their parents, along with 37% in the U.S. and 22% in the U.K.

In Asia’s emerging economies, where rising incomes are melding with a tradition of saving, people are much more optimistic. In India, for example, 69% of those surveyed expect to be better off than their parents, along with 62% in China.

What’s more, Chinese households save the equivalent of 38% of their GDP. In India, the figure is 35%. But in the U.S. that percentage drops to 4%, the report says.

The single source that’s still expected to provide people worldwide with retirement income? You guessed it – state pensions, such as Social Security.  But Westerners generally expect pensions provided by governments as well as employers to be less generous in the future, the survey found.

Yes, we are supposed to take responsibility for ourselves and save on our own, as the bankers who paid for this study point out. And there’s good incentive: The people who said that they have a financial plan for retirement save 2.5 times more toward retirement than people who don’t. But half of those surveyed said they have no financial plan, and 60% of those claim they don’t have enough money to warrant one. The study’s authors urge people not to wait to implement a financial plan until they think they have the money, since saving small amounts each month can make a big difference in the long run.


We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (5 of 17)

View all Comments »
    • To Marsha Deming,

      When did you pay off all you debt?

      Once you pay off your debt, this significantly reduces costs.

    • Okay — where are you able to get a steady return of 7%? Seriously — and try this all on minimum wage — not everyone in this world makes $40,000 per year or even close.

      My calculations (and my actual funds) show a return of somewhere between 2.1% and 3%. Everything (about a third in percentage) I had in stocks has tanked more than once — most recently in 2008 when I was losing 11% or better in value per quarter. I took advice and let it ride but that third is now vasting diminished in value. Only thing that had done reasonably well is gold and that I had just as a flyer (an amount I thought I could afford to lose).

    • I don’t think Marsha’s income was the same at the beginning as at the end of the 38 years. Neither is the cost of living. And this can vary drastically depending on your location. As pointed out, a lot of these so called formulas and calculators fail to take into account the 2002′s and 2008′s of real life. They also often fail to take into account inflation in the real world. Even at the relatively low rates of recent years, it may cut the worth of your assets in half. At the rates of the 70′s, assets would be decimated. And the government continues to increase pouring more borrowed money into the system. This can only encourage inflation. And you have see-no-evil monkeys saying we should only measure the cost of living without including the cost of energy or food (as if anyone could do any living without any energy or food!). Sigh. What a world!

    • Its obscene that you think SS is an acceptable retirement plan. Word of advice: dont trust the government with your financial future.

    • It is obscene that the wealthiest in the US pay the lowest tax rates in the civilized world and pay nothing into the SocialSecurity system. All income from all sources should be subject to the same Social Security tax. If this were the case there would be no Social Security problem in the near, middle, or distant future.

About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.