The HSBC Group has published a comprehensive study on global attitudes to aging and retirement,1 which shows that for many people traditional retirement is a thing of the past: 80 percent want to scrap mandatory retirement and 75 percent want to keep working in their maturity. Less than a quarter (21 percent) of the respondents of all ages said that never working for pay again would be part of their ideal retirement.
Titled "The Future of Retirement," the study interviewed more than 11,000 people worldwide and examined attitudes in Brazil, Canada, mainland China and Hong Kong, France, India, Japan, Mexico, the United Kingdom and the United States—countries and territories that contain over half of the world's people and combine to give a representative sample of the global population.
Sir John Bond, group chairman of HSBC Holdings, said, "The aging of the baby boomer generation, declining fertility rates,2 and increasing lifespans3 are combining to create new and complex demographic pressures around the globe. The resulting changes will in many cases be very positive but they also create real challenges, not least with regard to the funding of retirement. It is critical that governments, regulators, corporations and financial institutions understand these emerging trends in behavior and attitude if we are to successfully tackle the pressing issues before us."
In six of the ten societies surveyed, alternating work and leisure was seen by the majority as the ideal "later lifestyle"—a shift away from the notion that later life is dominated by a passive retirement. Even in India and the United Kingdom, the most skeptical nations about flexible work arrangements, more than a quarter want to take on some work in their later years.
The median age of the global population will increase dramatically by 2040,4 straining the funding of retirement. But given the choice between increasing taxes, reducing pensions or raising the retirement age to ease this burden, 45 percent of the respondents worldwide chose the latter, emphasizing the desire of many to make their own decisions. Just 26 percent said they would accept higher taxes. Only 15 percent opted to reduce pension benefits.
"This new way of thinking highlighted by the research should change the way governments, companies and financial institutions deal with aging and retirement. Instead of adhering to the traditional model where individuals go to school, spend many years working and then retire, we need to think about a truly blended life plan where people can cycle through periods of work, leisure and education," said Dr. Ken Dychtwald, renowned gerontologist and president of Age Wave, the U.S.-based consultancy practice which managed the research for HSBC.
"There is a clear need across the world for better, smarter advisory services combined with more flexible, more transparent savings and investment products," Dychtwald said. "It would be foolish to ignore the economic realities driving some of these changes in attitude but they are no more important than the increasing quality and length of later life that leaves us wanting more than our parents and grandparents expected from retirement."
Highlights from the 'HSBC Future of Retirement' Study
Here's how different countries view old age and retirement:
- Canadians view their later years as a time of reinvention, ambition, and close relationships with friends and family.
- Americans view their later years as a time for opportunity, new careers, and spiritual fulfillment, but are less focused on family or health than are other countries.
- The French view these years as a time of dreams and aspirations, but also as a time of worry, and they are concerned about being a burden to their families.
- The British view later life as a time of self-sufficiency, independence, and personal responsibility, counting on neither government nor family to care for them.
- Brazilians view later life as a time for slowing down, relaxing, and spending time with their families, relatives, and friends, and they expect significant support from their children.
- Mexicans see it as a time for continued work and hard-earned financial stability.
- In China, younger generations view retirement as an opportunity for a new life but continued careers, while older generations want to stop working and relax. All Chinese people view family as an important source of happiness and support.
- Respondents from Hong Kong view it as a time for rest, relaxation, and the enjoyment of accumulated wealth, which is seen as the cornerstone of well-being.
- Respondents from India view later life as a time to live with and be cared for by their families.
- The Japanese look forward to their later years as a time of good health, family considerations, and continued fulfillment from work.
"The Future of Retirement" study was conducted by market research company Harris Interactive under the guidance of HSBC and Age Wave. For further information on this subject, please visit www.hsbc.com/futureofretirement.
Endnotes
- Conducted in the fourth quarter of 2004, "The Future of Retirement" study canvassed 11,453 adults in ten nations and territories: Brazil, Canada, China, France, India, Japan, Hong Kong, Mexico, the United States and the United Kingdom. The sample size in each nation was approximately 1,000 except in India, China, and Japan, where it rose to around 1,400 to ensure proper coverage of large and diverse populations. The research was carried out by Harris Interactive under the direction of AgeWave and HSBC.
- According to United Nations Department of Economic and Social Affairs, Population Division, research titled "World Fertility Report 2003," between the 1970s and the 1990s global fertility dropped to an average of 2.9 children per woman from 5.4 children.
- According to United Nations Department of Economic and Social Affairs, Population Division, research titled "World Population Aging," 1 in every 5 people in the world will be over age 60 by 2050, from 1 in 12 in 1950.
- According to United Nations Population Division research, the
median age of each surveyed society will change as follows:
