Women set for financial struggle in retirement
08 March 2013
News, Asia, Global
By Asia Asset Management
Women in Asia are more likely to struggle financially in retirement than men, with only two in five, on average, saying they have prepared adequately for a comfortable retirement compared to half of men surveyed by HSBC for its new Future of Retirement report: A New Reality.
The survey also found that on average, women face a bigger retirement savings void of at least a decade as they expect to live longer in retirement – 23.3 years versus 18.5 years for men – with their savings enough to last only ten years. Asian women, however, appear to be better positioned than other women across the globe – of which only a third claim their retirement preparations are sufficient to achieve the retirement they want.
Louisa Cheang, HSBC’s group general manager and regional head of retail banking and wealth management, Asia-Pacific, said: “The Future of Retirement survey shows that people are generally unprepared for retirement, though the situation appears more alarming for women as they expect to live longer with less savings. With more women getting the same opportunities in education and employment today, they stand a better chance of achieving the kind of retirement they want compared to women in past generations. But they need to take the first steps towards financial independence now.”
Fewer women have financial plans
Globally, fewer women are saving regularly than men: 46% versus 50%, although this ratio improves in Asia: 54% versus 56%. Nevertheless, given the choice between saving for a holiday and retirement, 41% of female respondents in Asia would save for short-term goals, compared to 35% of men. The global averages are 47% and 39% respectively.
In addition, the survey showed that of Asians who are not yet fully retired, men set aside US$380 every month for retirement compared to $336 for women. Australian women save far less than men at $255 versus $433 – the biggest gap in the region; while Chinese women have nearly the same level of monthly retirement savings as men – $219 versus $226.
Asians yet to retire are most worried about poor health and financial hardship in retirement. The concern over financial hardship is generally more prevalent among women, except in Malaysia, although the difference is minimal. In Australia, the difference between women and men is most evident: 69% versus 54%.
In Asia, 32% of women said they have a financial plan in place, while 37% of men do. The percentage of women with a financial plan is the highest in India, followed by China, Hong Kong and Singapore. China is the only market in the region where women outnumbered men in this regard: 40% vs 38%. Globally, female respondents who have taken professional advice said they more than doubled (2.3 times) their savings while men nearly doubled (1.9x) their savings compared to those who have not.
Ms. Cheang said: “We recognise that while more women are contributing to the family income, many of them may not be making the financial decisions at home. More importantly, while they may be saving for the family, they are likely to overlook their own financial needs. Our survey shows that any form of financial planning can lead to higher savings. Whether it is setting aside an amount for your own retirement pot regularly, ensuring you have adequate health protection or speaking to a professional financial advisor to start a broader financial review, this will help women prepare for financial security in later life.”
The HSBC’s Future of Retirement program surveyed more than 15,000 people in 15 markets worldwide, including Australia, China, Hong Kong, India, Malaysia, Singapore and Taiwan.
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