- An understanding of what people expect their quality of life to be in retirement
- An understanding of how prepared individuals believe they are for retirement versus their projected outcome
- An analysis of what should be done to mitigate these risks
The significant shift from defined benefit (DB) to defined contribution (DC) arrangements means that employers are increasingly transferring retirement risk to employees unknowingly. This transfer of responsibility coupled with an ageing population led three actuarial associations (the Actuaries Institute of Australia, the Institute and Faculty of Actuaries in the United Kingdom, and the American Academy of Actuaries) to conduct a joint survey to see how prepared citizens in each country are for retirement.
The three associations determined that longevity risk was a major issue in each of their countries and prepared a White Paper, The Challenge of Longevity Risk, to alert the public and policymakers to our concerns. The Retirement Readiness Report summarises the results of the joint survey that we subsequently commissioned to investigate adequacy, the first of the five principles we identified in our report as necessary to addressing longevity risk.
By using this approach, we could see if and how different cultural and historical practices and policies produced different preparations for and perceptions of retirement. This enabled us to identify those policies and practices that result in better or worse retirement planning.
Although our survey found that respondents are best prepared with respect to saving and acquiring information, respondents are least prepared with respect to:
- Knowing how much they will need when they retire
- Knowing how long their money will last
- Preparing for longevity risk and social care
Based on these results, we have identified a number of recommendations to help citizens better prepare for retirement and determine what constitutes as adequate for their plans. These recommendations include:
- More targeted financial education
- More default options, including for both accumulation and decumulation
- Improving State Pensions adequacy and sustainability
- 11 October 2017
Policy Briefing: Retirement Readiness Survey Report from Australia, the United Kingdom & the United States11 October 2017
- 22 October 2015
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