Even after spending their adult life in employment, most people (51%) plan to continue working after retirement to preserve their health and wealth, a new report finds.
Younger generations hope to retire earlier than their predecessors. But the financial implications of living longer and other challenges have led to 85% of those surveyed citing financial concerns as a key motivation behind the decision to continue working in some capacity beyond retirement, according to the inaugural HSBC Quality of Life Report.
Financial reasons include ensuring financial security, affording a comfortable lifestyle, and meeting financial obligations. Many also allude to more holistic reasons, including staying engaged and active (70%) or building skills and knowledge (51%).
Despite most people already saving for retirement, over half of them feel financially unprepared for this stage in their life.
On average, there is a gap of 71% between actual retirement savings and the amount needed, the report finds. In Hong Kong, people anticipate needing the most savings to lead a comfortable lifestyle during retirement at US$1.1 million, followed closely by Singapore’s US$936,000, mainland China’s US$929,000, and Malaysia’s US$829,000.
With the rising cost of living, this gap is growing. The survey shows that 42% of respondents are concerned about the impact of inflation eating into the value of their savings, while 40% are worried about higher healthcare costs. Notably, respondents in Singapore and Hong Kong have expressed heightened concerns about healthcare costs, more than any other market surveyed.
“The challenges and priorities shared by survey respondents on their retirement underscore the need to build awareness of financial planning solutions that address the key issues head on,” says Lavanya Chari, HSBC’s global head of investments and wealth solutions, global private banking and wealth.
“Contributing early to a pension plan is a good place to start, as is investing in a diversified portfolio including stocks and bonds to help counteract inflation. It is important to consult an expert who can help identify needs and tailor a personal plan.”
Other key findings of the report:
- Millennials (age 25-39) aspire to retire seven years earlier than Boomers (55-69) on average.
- The impact of current economic uncertainty is apparent; 58% of global respondents want to gain wealth for financial security in the present and near-term future as a top financial goal.
- Over one-in-four individuals plan to relocate at some point to achieve a better quality of life.
- Less than half of respondents have written a will and 20% say they are unsure how to start with legacy planning.
The HSBC Quality of Life Report gathered data from 2,250 respondents in mainland China, Hong Kong, India, Malaysia, Mexico, Singapore, the United Arab Emirates, the United Kingdom, and the United States.