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U.S.
workers confident - but not well-informed - about
retirement income, according to AXA's Global Retirement
Survey
NEW YORK, Jan. 24 /PRNewswire-FirstCall/ -- Did you know that more than 7,900 Baby Boomers are turning 60 years old every day -- more than 330 an hour? Yet with record numbers of Americans entering retirement, only one in five workers actually knows what his or her specific retirement income will be. And although Social Security is a significant income element for retirees, more than 90 percent of current workers view Social Security as "troubled" or "in crisis."
These are among the findings released today from the AXA Equitable Retirement Scope, a global survey on retirement. The survey offers surprising consumer insights on work, life, money and retirement from more than 6,900 people in 11 countries. American workers' confidence in their retirement income may stem from observing their parents. Current U.S. retirees report on average $4,243 in monthly income -- the highest amount of any country in the study; nearly double the Canadians and well ahead of France, Japan and Germany. Despite this confidence, most American workers are concerned about the source of income in retirement, as 92 percent believe our current Social Security program is in some degree of trouble. Retired respondents agree, but to a lesser extent: 84 percent have lost faith in the program, even though 70 percent rely on Social Security and pension plans "heavily" for retirement income. Consequently, nearly 65 percent of America's working respondents plan to rely on their own retirement savings or income sources rather than Social Security or pensions, the survey finds. High expectations for retirement income may influence U.S. workers' hopes to continue working in retirement, as 63 percent of those surveyed desire to hold a paid job once retired. Other key findings include: * Americans lead the world in preparing for their retirement. Nearly 85 percent of working Americans have already started planning for retirement, leading all nations. On average, the American worker starts saving at age 30 and sets aside $1,253 monthly for retirement, a figure that more than doubles retirement savings in all other surveyed nations. However, the median amount is $463 monthly, also significantly more than the median amount in the other surveyed nations. * Nearly half of retirees surveyed have invested in real estate. Home ownership is high among retirees in the U.S.: 91 percent own theirhomes, 15 percent own two. * Nineteen percent of U.S. workers expect retirement income to be higher than their last salary, an optimism that trumps all other surveyed nations. Retirement income has increased for 20 percent of U.S. retirees, well above that of Australia and the U.K., both tying for second, each with 14 percent of retirees experiencing similar good fortune. * On average, people would like to retire before 60 years old but realize it's not likely to happen. Working people consider 55 the ideal age for retirement but don't expect to retire until 62; retirees would retire at age 59 if they could do it again. On average, Canadians and Americans retire earliest; nearly three out of four American retirees did so before age 65. * Retirement travel isn't all that U.S. workers hope. Nearly 60 percent identify travel as a top priority in retirement, but only 31 percent of retirees value travel as much. American retirees travel more than their foreign counterparts, but rarely leave the country. * Americans plan to spend retirement savings, not pass them on to heirs. Sixty-four percent of working Americans expect to spend their savings in retirement; only a third expect to maintain savings and pass them to surviving family members. French respondents are most generous with their inheritance; it's the only population in which more than half of workers plan to pass retirement savings on to heirs. Even more (71 percent) of French retirees are doing the same. "Overall, our survey findings suggest that Americans are confident -- but realistic -- about the financial outlook for retirement," said Ken Gelman, Vice President and Director of Market Research for New York-based AXA Equitable, which represents AXA in the U.S. "Respondents expressed a fair amount of optimism about their incomes and living standards in retirement, but they seem to understand that much preparation and planning are necessary to achieve these goals." The survey is part of AXA's continued effort to enhance its understanding of the issues, perceptions, concerns and wishes surrounding retirement, for the ongoing development of innovative financial and retirement planning services. Both workers and retirees were surveyed about their financial preparations, quality of life and views on retirement. Gelman added, "Retirement is becoming reality for a rapidly increasing number of Americans. The more we know about their perceptions, the better equipped we are to help them approach this life chapter with confidence, leveraging opportunities for managing, growing and protecting their assets. AXA Retirement Scope illustrates that Americans are acutely aware of the need for intense preparation and supports our strategy to provide advice and solutions to secure their financial well-being." AXA contracted with research firm GFK Sofema, which managed the survey globally. Local firms fielded the questions in each country during August 2005. AC Nielsen conducted the survey by telephone in the U.S. A total of 6,915 people between 25 and 75 years old were interviewed in: Australia, Belgium, Canada, France, Germany, Hong Kong, Japan, Italy, Spain, United Kingdom and the United States. The main sample from the U.S. included 848 people, 435 of whom were working and 413 were retired. In addition, AXA boosted sample sizes in Chicago, Detroit, Los Angeles, Miami and New York to gain specific information on these influential markets. These additional respondents were not included in the main sample.
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