Eight Out of 10 People Don't Know How Much They'll Need for Retirement
Nearly 80 per cent of workers underestimate how much they will need to save for their retirement, according to new research.
Carried out by deVere Group, one of the world’s largest independent financial advisory organizations, the study found that 78 per cent of all new, working age clients did not realize how much money they would need in order to fulfil their own retirement ambitions before they began working with an independent financial adviser.
More than 600 new and potential clients in the U.S., the UK, Hong Kong, Australia, and South Africa participated.
Nigel Green, deVere CEO and founder, commented: “In the last few years, it has become clear that working age people do increasingly understand the need to save for their retirement. They know that saving for their retirement is now, without question, a personal responsibility for each and every one of us.
“However, what is alarming is that the vast majority do not know just how much they will need to save. This black hole in the detail – not knowing how much they will need in something as fundamental as funding their retirement – is extremely concerning indeed.”
He continues: “How much you will need to save for your retirement is a very subjective issue. It will depend on a variety of key factors including your current age, at what age you want to stop working, how much income you will expect in retirement, what your retirement aspirations are, whether you are due inheritances, and your current personal financial circumstances, amongst many others.
“Like many professional independent financial advisers, we use a detailed ‘fact-find’ process based on the information given by the client, plus economic and market analysis, to discover how much people need to be putting aside now and in the years to come in order to be able to enjoy the retirement they desire. Bearing this in mind, how much you need to save will, naturally, vary from one person to another.
“But our recent research highlights that there’s one very definite common theme: before they sit down with an adviser, the overwhelming majority of people underestimate how much they need to be putting aside for their retirement.
“This is true across all incomes, working age brackets and nationalities.”
The deVere CEO concludes: “Despite 78 per cent of those who took part in this research having unrealistic expectations about their retirement savings, at least now they are fully in the picture and can start getting serious about funding the retirement they want. There are ways to plan and maximize retirement savings at every stage of your working life.
“It is better to know and start to get on track sooner rather than later. I would urge people to take their heads out of the sand and get informed. By having a clear financial plan you’re laying the foundations to have an active, comfortable and secure retirement.”