How much have you saved for retirement? How much do you need to save for retirement? A report by HSBC says many people don't know, and it offers ways to step it up and avoid being caught short.
Ready or not, your retirement is approaching. And chances are you won’t be ready, warns HSBC.
But the world’s second-largest bank offers four giant steps to help you prepare for retirement in its new report, “The Future of Retirement: A balancing act.”
More than half of American workers say they are too far in debt to save adequately for retirement, says the HSBC study, which surveyed 16,000 people online in 15 countries, including 1,000 in the United States. About four in 10 American workers said they didn’t know how much to save, and many didn’t know how soon to start saving.
In the video below, Money Talks News savings expert Stacy Johnson explains why many of us will find it more challenging than our parents did to have a comfortable retirement. Watch the video and then read on for tips on retirement savings.
“What we found is that people haven’t taken the time to truly understand what they need for the future,” Michael Schweitzer, head of sales and distribution for group wealth management at HSBC, told CNBC. “For example, almost 75 percent of people in retirement have told us that they didn’t realize that they had a shortfall until they were actually in retirement and that’s one of the critical issues we’re trying to draw attention to.”
The global economic downturn dented savings efforts around the world, Schweitzer said. People raided their retirement funds and accumulated debt during the financial crisis.
In the United States, the HSBC report says, many working-age people stopped or reduced saving for retirement.
How much is enough?
Many retirees told HSBC their annual household incomes were well below what they deemed necessary for a comfortable retirement: $72,500. More than two in five retirees said they live on a household income of less than $65,000 a year.
More than one in 10 working-age people told HSBC they will never be able to fully retire; around three in five said they cannot afford it, and three in 10 believe they will not be able to maintain a comfortable lifestyle.