Survey-takers were asked to what extent the following negatively impacted their confidence with regard to being financially prepared for retirement (ordered by impact, determined by the persistence of the answer in each country’s top three concerns):
1. Uncertainty about my retirement plans
2. No spare money to save for retirement
3. Lack of trust in retirement savings plans
4. Complexity of retirement savings plans
5. COVID-19 situation (38% cited high impact on preparedness in both Australia and Ireland)
6. Medical expenses (39% cited high impact on preparedness in the US)
7. Mortgage debt and housing costs
8. Financial dependency of children or elderly family members
9. Short-term debt, loans and credit card bills
Interestingly, known expenses like housing costs, family support or short-term debt ranked as the lowest concerns, possibly because these items could be planned and, to a degree, controlled. The issues raising the greatest anxiety offered more existential threats: uncertainty, scarcity, institutional distrust.
Concern about COVID-19-related consequences falls in the middle, potentially reinforcing the idea that the coronavirus crisis isn’t the problem, but the magnifier, increasing existing retirement security concerns.
At State Street Global Advisors, we believe that a well-diversified retirement savings strategy can help address the feelings of destabilization that savers are facing across the globe. Beginning with a carefully considered investment menu and thoughtful plan design, bolstered by participant communication proficiency and informed by public policy expertise, our global team can help foster conversations around retirement readiness for both employers and employees.
Let’s use this present moment to prepare for our collective future, championing changes that ease existing pressures and pursuing a balance between financial flexibility and security in retirement.