U.S. Retirees Face Seven Years of Pain as Retirement Savings Run Out Business Wire NEW YORK -- February 20, 2013 Many Americans are facing a significant fall in their living standards during the final seven years of retirement due to inadequately funded long-term savings, according to a new piece of research released today from HSBC Group. ‘The Future of Retirement: A New Reality^1’, based on a survey of over 15,000 consumers in 15 global markets, finds that Americans will on average run out of all funds beyond their state and occupational pensions some 14 years into retirement, thus leaving them potentially unprepared for additional living expenses in later retirement, such as funding long-term care. The report also concludes that the average length of retirement internationally is now 18 years while the average retirement savings is expected to last for just ten. It predicts the situation is only likely to worsen as life expectancy continues to rise around the world. Andrew Ireland, EVP, Retail Banking and Wealth Management, HSBC Bank USA, N.A., said: “The concept of retirement is evolving all the time, and we knew that the U.S. and the rest of the world is not prepared - but now we know by just how much.” “People are living longer, through tougher economic times, but expectations about their standard of living in retirement remain unchanged. As a result, millions of people around the world are facing years of hardship after their savings run out.” According to the study, currently 56% of the world’s working population is not preparing adequately for a comfortable retirement, with 1 in 5 (19%) saving nothing at all. Financial concerns were cited by those yet to retire as their greatest fear about living in retirement, with 57% saying they feared financial hardship, and 46% worrying that they would be unable to afford good healthcare provision. Yet in spite of this, when asked to choose, almost half (43%) of those not yet fully retired are willing to prioritize saving for going on holiday over saving for their retirement. The study also showed how vulnerable retirement savings are to being raided to cover shorter term needs, with almost a third of those yet to retire (29%) admitting they would dip into their retirement pot to cope with life events such as buying a home or paying for children’s education. Andrew Ireland continued: “People throughout history have faced the question of how to provide for the future, and today’s savers are no exception. Yet as daunting as the current challenges may seem, the solution is very simple: the earlier you start to plan the better prepared you will be. “For some this may mean beginning to save more, whereas others will choose to work longer. The key is for everyone, regardless of age or income, to make a plan to help them get the retirement they expect.” Savings shortfall by countries surveyed: Median Median time Total savings Time with length of before savings shortfall savings in as a retirement run out (years) % of total (years) (years) retirement Global 18 10 8 56% 1 UK 19 7 12 37% 2 Egypt 11 5 6 45% 3 France 19 9 10 47% 4 China 20 10 10 50% 5 Taiwan 18 9 9 50% 6 Brazil 23 12 11 52% 7 Australia 21 11 10 52% 8 Mexico 17 9 8 53% 9 Singapore 17 9 8 53% 10 Canada 19 11 8 58% 11 UAE 15 9 6 60% 12 Hong Kong 17 11 6 65% 13 USA 21 14 7 67% 14 India 15 10 5 67% 15 Malaysia 17 12 5 71% Note to editors (1) HSBC’s The Future of Retirement program is a world-leading independent study into global retirement trends. It provides authoritative insights into the key issues associated with aging populations and increasing life expectancy around the world. The latest Future of Retirement campaign is the seventh in the series and is based on interviews with 15,866 people in 15 countries. Since the Future of Retirement program began in 2005, more than 125,000 people world-wide have been surveyed. Visit: http://www.hsbc.com/1/2/retirement/future-of-retirement HSBC Bank USA, National Association, with total assets of $196bn as of 30 September 2012 (US GAAP), serves 3 million customers through retail banking and wealth management, commercial banking, private banking, asset management, and global banking and markets segments. It operates more than 250 bank branches throughout the United States. There are over 165 in New York State as well as branches in: California; Connecticut; Delaware; Washington, D.C.; Florida; Maryland; New Jersey; Pennsylvania; Oregon; Virginia; and Washington State. HSBC Bank USA, N.A. is the principal subsidiary of HSBC USA Inc., an indirect, wholly-owned subsidiary of HSBC North America Holdings Inc. HSBC Bank USA, N.A. is a member of the FDIC. Cicero Consulting Aleading consultancy firm serving the banking, insurance and asset management sector, Cicerospecializes in public policy consulting as well as global thought leadership and independent market research. Cicero was established in 2001 and now operates from offices in London, Brussels, Washington and Singapore. As a market leader in pensions and retirement research,Cicero designed and analyzed the research and wrote this report, with Mark Twigg as author and Paul Middleton as research director. Visit:www.cicero-group.com Contact: Media inquiries HSBC – North America Neil Brazil, 847-208-4319 firstname.lastname@example.org
U.S. Retirees Face Seven Years of Pain as Retirement Savings Run Out
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