Dubai: Nine out of 10 workers are financially sleepwalking into the retirement, a survey revealed.
DeVere Group conducted a survey in which 750 new and potential clients in the UK, the US, Australia, South Africa, Hong Kong, Spain, France, Germany, and the UAE participated, found out that their clients did not realise how much money they would need in order to fulfil their own retirement ambitions before they began working with an independent financial adviser.
“It is very alarming indeed that nine out of ten workers are financially sleepwalking into their retirement,” Nigel Green, founder and CEO of deVere Group said.
“The poll concludes that the overwhelming majority simply do not know just how much they will need to save during their working lives to fund the retirement they desire. Not knowing how much they will need for something as important as funding their retirement is worrying,” Green said.
In the UAE alone, another survey done by the CFA Institute earlier in the year pointed out that retirement is the last thing on the minds of savers. Most of the clients when asked about their saving plans were to save to start a business, followed by saving for a large purchase. This trend was unlike their counterparts globally to save for old age.
Optimum amount
DeVere Group said savers need to ascertain how much money they should be setting aside now for retirement, however they might not be right.
Green observes, there is a consistent theme: “Before they have an initial meeting with an adviser, the vast majority of people underestimate how much they need to be putting aside for their retirement. This is the case across all incomes, working age brackets and nationalities.”
“People are typically shocked when it is revealed how much they should be saving now to realise their own retirement ambitions later on. They have usually considerably underestimated the money they will need,” he added.
“Despite the shocking poll, there are always methods to plan and maximise retirement savings at every stage of your working life. But it cannot be stressed enough that the earlier you start your retirement planning strategy, the easier the journey to hitting your goals will typically be. I would urge people to take their heads out of the sand and get informed,” Green said.
“By putting in place a clear, workable plan, you’re laying the foundations to have a comfortable and financially secure retirement,” he added.
Investment fears
Retail investor fears are also related to their goals; thus, many have concerns about retirement-related issues, either a financial crisis that reduces the value of their retirement portfolio, or living past their wealth. “Investors of all ages have similar concerns, although younger investors are also worried about missing out on investment opportunities.
These fears are not decades away either, as nearly 40 per cent of retail investors globally fear another financial crisis within the next three years,” the CFA Institute survey said.
In the last two years, the expectation of a financial crisis has increased in all markets surveyed except India and France, the CFA Institute said in March.
The largest increases are in the US, the UK, and Hong Kong. Younger investors are also more concerned about an impending crisis in the next three years, with 48 per cent of investors age 24—34 deeming it very or extremely likely.
