The World Isn’t Prepared for Retirement


…take a look at this question—which only 45 percent of people around the world got right:

Q. Do you think the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.”

Sixteen percent of people got it wrong. “Do not know” was chosen by 38 percent. In the U.S., 46 percent of workers got it right. Good for you, America—though Germany beat you handily. (The answer, in case you were wondering, is false.)

It was an inflation question that had the highest percentage of wrong answers, however. More than 20 percent of workers didn’t grasp how higher inflation hurts their buying power.

Across the board, though, workers didn’t seem to recognize the huge impact that basic changes in the labor force, technology and the climate will probably have on their retirement plans, said Catherine Collinson, president of the nonprofit Transamerica Center for Retirement Studies and executive director of the Aegon Center for Longevity and Retirement.

Many workers may well be in denial about how long they can actually work. The survey found workers generally plan to retire around age 65. “The sobering reality is that 39 percent of retirees globally retired sooner than planned,” according to the report. “Of those, 30 percent stopped working earlier than they had planned for reasons of ill health, and 26 percent due to unemployment/job loss.”

TL;DR: A large portion of people don’t know how to prepare for retirement.

The article also shows a picture of the 3 question survey, including one that asks about inflation: “Imagine that the interest rate on your savings account was 1 percent per year and inflation was 2 percent per year. After 1 year, how much would you be able to buy with the money in this account?”.

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