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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.


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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.