NEW YORK--(BUSINESS WIRE)--US millennials expect to retire at age 58 – earlier than any other western market globally – and are taking a number of steps to make it happen, according to HSBC’s latest Future of Retirement research.
To help achieve their earlier retirement goal, the research found that 80 percent of US millennials have already started saving for their retirement, with another three quarters (75 percent) citing plans to cut expenses to save more for retirement.
HSBC’s Future of Retirement research, now on its fourteenth edition, surveyed more than 18,000 people across 16 countries to understand trends and key issues associated with retirement.
Millennials are savvier and bolder investors than the rest
In addition to early retirement plans, millennials in the US are gearing up to increase their retirement savings more than the generations before them.
Almost half of US millennials surveyed are willing to take on more risk in their investments to generate wealth. The research also found that investment appetite across other generations is stark. Indeed, only 27 percent of Gen X and 13 percent of Baby Boomers are willing to take on the same risk profile.
According to the study, US millennials are yearning to learn with 63 percent of millennials actively seeking information to guide their financial decisions, compared to Gen X (49 percent) and Baby Boomers (34 percent).
A perfect storm
Despite their expectations and efforts to retire early, economic challenges and longer life expectancy present significant challenges to millennials’ retirement plans.
HSBC wealth planning expert Brian Schwartz explained, “While millennials are broadly aware of the economic and demographic challenges they face, they do not appear to have grasped how these factors could hinder their efforts to retire early and comfortably.”
For example, the vast majority of respondents (82 percent) anticipate higher healthcare costs in the future, while an additional 56 percent are concerned about declining social safety nets like state pensions and social security. Overall, respondents also anticipate that millennials will live longer than previous generations, suggesting they will to need save for a longer retirement (62 percent).
“As a financial advisor, my job is to reconcile the unexpected and unknown with the financial aspirations of my clients,” Schwartz said.
Other key findings from HSBC’s Future of Retirement research
- 73 percent of working age people in the US would defer retirement for two or more years to have a better retirement income
- 65 percent of working age people in the US anticipate working to some extent during retirement
- 46 percent of working age people in the US would work for longer or get a second job to save more for retirement
HSBC Bank USA, National Association (HSBC Bank USA, N.A.), with total assets of US $178.7 billion as of 31 December 2016 (US GAAP), serves 2.4 million customers through retail banking and wealth management, commercial banking, private banking, asset management, and global banking and markets segments. It operates more than 230 bank branches throughout the United States. There are over 145 in New York as well as branches in: California; Connecticut; Delaware; Washington, D.C.; Florida; Maryland; New Jersey; Pennsylvania; Virginia; and Washington. HSBC Bank USA, N.A. is the principal subsidiary of HSBC USA Inc., an indirect, wholly-owned subsidiary of HSBC North America Holdings Inc. HSBC Bank USA, N.A. is a member of the FDIC.
Notes to editors:
Millennials are those born between 1980 and 1997. The Future of Retirement is a world-leading independent research study into global retirement trends, commissioned by HSBC. It provides authoritative insights into the key issues associated with aging populations and increasing life expectancy around the world. Since The Future of Retirement program began in 2005, over 177,000 have been surveyed worldwide.
This is the fourteenth Future of Retirement report in the series and represents the views of 18,414 people from 16 countries and territories: Argentina, Australia, Canada, China, Egypt, France, Hong Kong, India, Indonesia, Malaysia, Mexico, Singapore, Taiwan, United Arab Emirates, United Kingdom and the United States of America.
The findings are based on a representative sample of people of working age (21+) and in retirement, in each country or territory. The research was conducted online by Ipsos MORI between November 2016 and January 2017, with additional face-to-face interviews in Egypt and the UAE.
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 4,000 offices in 70 countries and territories in Europe, Asia, North and Latin America, and the Middle East and North Africa. With assets of US$2,375bn at 31 December 2016, HSBC is one of the world's largest banking and financial services organizations.
For more information about The Future of Retirement, visit www.us.hsbc.com.