According to a report by the World Economic Forum (WEF), 44% of people under the age of 40 want to retire before the age of 60. However, the report highlights that there is a significant gap between this aspiration and the reality of retirement planning. The WEF emphasizes that early retirement can exacerbate the savings gap and negatively affect retirement incomes, both at the individual and macroeconomic level. CNBC.
Several countries have already raised the state pension age due to concerns about insufficient savings and the sustainability of pension funding as life expectancy increases.
When analyzing the entire data set, 40% of the respondents in each age group indicated that they would like to continue working after the age of 65. The report was compiled by interviewing more than 350 people in each country around the world and provides insight into attitudes towards retirement.
The survey reveals that 55% of respondents feel they do not have enough savings for retirement or are unsure about their financial preparedness. In addition, 37% of people under the age of 40 did not think about how much money they will need in retirement.
Although the respondents indicated that they would be satisfied with a lower income in retirement compared to their current salary, there is a significant difference between the desired income level and the planned retirement income. According to the WEF, working longer, saving more, accepting lower retirement income and taking a higher-risk approach to investing can help bridge this gap. However, the report stresses the need for caution, as each approach has economic, social and political consequences.
The report also highlights the financial concerns of younger generations: 45% of respondents under the age of 40 believe that they will have to financially support older generations.
This finding suggests that the trend of relying on parental financial support, often referred to as the “bank of mum and dad”, may be reversing. Regional differences also emerge from the report: compared to Europeans (28%), more people in North America (38%) expect to financially support the elderly. It also highlights the potential impact of caregiving on respondents’ own financial stability, as two-thirds of respondents expect to have to care for elderly family members.
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