Nearly half of active workers and retirees globally feel future retirees will be worse off than current retirees, said the Aegon Center for Longevity and Retirement's annual retirement readiness survey released Tuesday.
The Transamerica Center for Retirement Studies and the Instituto de Longevidade Mongeral Aegon, which is based in Brazil, collaborated on the survey whose respondents include 14,400 active workers and 1,600 retirees spanning North and South America, Asia, Europe and Australia.
The survey, which asked workers and retirees about global trends impacting their plans for retirement, found that 49% of global respondents and 46% of U.S. respondents believe future generations of retirees will be worse off than current retirees.
"Megatrends are disrupting long-standing societal constructs, including how people live and work, plan for their future and, ultimately, prepare for their retirement," said Catherine Collinson, CEO and president of the Transamerica Institute and Transamerica Center for Retirement Studies, and executive director of the Aegon Center for Longevity and Retirement, in a news release about the survey's findings.
The five trends cited most frequently by respondents were reductions in government benefits (cited by 38% of global respondents and 26% of U.S. respondents), increased life expectancy (27% globally, 25% in the U.S.), volatility in financial markets (24% and 22%, respectively), labor market changes (21% and 14%, respectively), and a prolonged low-interest-rate environment (20% and 14%, respectively).
Other findings from the survey report include:
- 43% of global workers and 57% of U.S. workers reported having access to an employer-sponsored retirement that includes an employer contribution.
- 25% of global workers and 32% of U.S. workers believe they are on course to meet their expected retirement income.
- Only 7% of global workers and retirees and 9% of U.S. workers and retirees believe social security benefits will remain affordable and governments should do nothing to address the costs.
"A new social contract for retirement is needed at this time when megatrends are disrupting how people live, work and prepare for a secure retirement," Ms. Collinson added in the news release.
According to the report's authors, a social contract involves three pillars — governments, employers and individuals — "each with a specific set of expectations and responsibilities."
Design features of the new social contract, according to the report's authors, should include: sustainable social security benefits, universal access to retirement savings vehicles, automatic savings, guaranteed lifetime income strategies, financial education and literacy, longer working lives and flexible retirements, accessible and affordable health care, and a positive view of aging.
The full survey report is available on the TCRS' website.