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AXA Retirement Scope A global survey on life, work and retirement

AXA Retirement Scope A global survey on life, work and retirement. Results for the U.S., with international comparisons. Summary. 1 : Introduction Objectives p.3 Methodology p.4 2 : Analysis How do people see retirement? What are the activities of retirees? p.10

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AXA Retirement Scope A global survey on life, work and retirement

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  1. AXA Retirement Scope A global survey on life, work and retirement Results for the U.S., with international comparisons

  2. Summary • 1 : Introduction Objectives p.3 Methodology p.4 • 2 : Analysis How do people see retirement? What are the activities of retirees? p.10 How do people prepare for retirement? p.48 Are people happy? p.70 Use of technology, progress, holidays, other topicsp.75 • 3 : Conclusions p.92

  3. Introduction: AXA Retirement Scope Objectives • Explore and understand the attitudes towards retirement. • Compare retirement perceptions and reality: from working and retired people. • Analyze the results for U.S. from an international point of view. • A major benchmark study on retirement

  4. AXA Retirement Scope Methodology • Geographical coverage: a total of 9,200 people interviewed in 15 countries. Netherlands Belgium Canada UK Germany France Spain • Arial 14 Japan United States Portugal Italy Hong Kong Singapore • Arial 14 Australia New Zealand Base : n=300 working, n=300 retired Specifically for the US: n=403 working, n=410 retired

  5. Methodology • American sample structure: 403 working people over 25 years old / 410 recently retired and retired people less than 75 years old. Sample representative of the two populations for criteria on age, gender, region and occupation of the head of household. • Telephone interviews carried out by AC Nielsen • Questionnaire: 20 minutes • Fieldwork dates: October 11 – November 7, 2004

  6. Sample (1/4)Gender & Age Base : n=403 working, n=410 retired

  7. Sample (2/4)Regions Base : n=403 working, n=410 retired

  8. Sample (3/4)Occupation of the head of household Base : n=403 working, n=410 retired

  9. Sample (4/4)Family situation Base : n=403 working, n=410 retired

  10. How do people see retirement? What are their retirement activities?Working population versus retired people

  11. Working Retired 1. What is the ideal retirement age? Those who still work dream of an early retirement at 55 - or even 52 for the youngest of them. Nevertheless, they are realistic in thinking that they will retire later than their elders. Socio-demographic analysis Average age Male: 54 years; Female: 57 years years 25-44 years: 52 years; 45 years and more: 60 years years 45-64 years: 55 years; 65-75 years: 60 years Midwest: 61 years Male: 62 years; Female: 64 years 25-44 years: 62.years; 44 years and more: 64years years years 45-64 years: 54 years; 65-75 years: 60 years Midwest: 59 years Base : n=403 working, n=410 retired Q.11 Working: And, ideally, at what age would you like to retire? Retired: If you had the chance to ‘retire again’, at what age would you have retired? Q.10 Working: At what age do you think you will be able to retire? Retired: At what age did you retire?

  12. Working Retired 1. What is the ideal retirement age? In the U.S., the ideal retirement age corresponds to the global average, but actually the U.S. workers thinks they will retire later than workers in other countries. Actual retirement age Age people would like to retire Average age

  13. 2a. What do people think about increasing the age for retirement at their place of employment?An increase of the retirement age enforced in the workplace is largely debated. Workers agree that 61 should be the maximum age for collecting retirement benefits. Working Retired Regarding the increasing of the retirement age in place of employment: % % % % % % Approve Disapprove Neither approve nor disapprove Do not know % % Socio-demographic analysis Socio-demographic analysis Low income: 58%; Middle income: 50% Low income: 38% 25-44 years: 60 years 45 years and more: 62 years years years 45-64 years: 60 years 65-75 years: 64 years Base : n=403 working, n=410 retired Low income = less than $25,000 Middle income = from $25,000 to $49,999 High income = $50,000 and over Q.12 Working and Retired : What would you think if the age for retirement in your place of employment was increased? Q.13 In your opinion, at what age should one be able to collect full retirement benefits? (i.e benefits coming from work, pensions, 401K, government benefits, etc)

  14. Working Retired 2a. What do people think about raising the retirement age limit?Similar to Canadians and Asians, Americans’ attitudes against extending the retirement age limit are very different from that of Europeans. Up to what age can the retirement age be increased (average) % who disapprove of increasing the retirement age limit No question for Australia, New Zealand For New Zealand, USA, Canada, Hong Kong, Singapore : postponed of few years

  15. 2b. What do people think about raising the age to receive governmental social security benefits? A clear majority of both workers and retirees is opposed to postponing the payment of government social security benefits, but the opinions of the older retirees are mixed. Working Retired % Regarding the increasing of the age to receive social security benefits % % % % % % % Approve Disapprove Neither approve nor disapprove Do not know Socio-demographic analysis Socio-demographic analysis Midwest: 28% 45-64 years: 58%: 65-75 years:42% 45-64 years: 27%: 65-75 years:40% Question asked only in the U.S. Base : n=403 working, n=410 retired Q. 12b Working and Retired : What would you think if the age to receive governmental social security benefits was increased?

  16. Working Retired 3. What spontaneous thoughts come to mind when thinking about the word “retirement”? Retirement is seen as a positive change, even more among retirees. Retirement is especially associated with having more time for oneself and to enjoy life. In % Socio-demographic analysis Finally I have time to do other things/to do things I am interested in Finally I will be able to enjoy my life Finally I have time to spend for myself End of work Finally I have nothing to do Finally I have time to spend for others Rest Travels Leisure activities To have money/ to reach the age to receive pension/ insurance/ a stable income 0ld Death Poor Ill Do not know Northeast: 21% Middle income: 21%; High income: 21% Middle income: 15%; High income : 19% Total positive images: Working: 51% Retired: 56% Midwest: 14% High income : 63% Total negative images: Working: 13% Retired: 13% 45-64 years: 10%: 65-75 years: 5% Base : n=403 working, n=410 retired Q.25 Working and Retired: What thoughts come to mind when thinking about the word ‘Retirement’? [SPONTANEOUS PRE CODED QUESTION]

  17. Working Retired 3. What spontaneous thoughts come to mind when thinking about the word “retirement”? For a majority of Americans, the word retirement evokes positive images and, compared to other countries, very few negative images. Total positive images Total negative images In % In %

  18. Working Retired 4. Which activities are most popular among retirees? Retirement is richly spent in physical and manual activities: travel, sports, volunteer work with an association, hobbies, gardening, do-it-yourself projects. Women and men engage in different types of activities: women have more social and home-based activities, while men are more sports-oriented. Socio-demographic analysis In % Male: 41%; Female: 52%; Middle income: 48%, High income: 51% 45-64 years: 31%, 65-75 years: 40%, Middle income: 39%, High income: 48% Travel A hobby, particular interest Sport Voluntary work Gardening/DIY Visit the family Cultural interests, reading Social life, meet with friends Walking/hiking Join groups/associations Day trips/visits Back to college studies I’ll continue working Enjoy my grandchildren Buy or build a house Do not know Male: 24%; Female: 15% Male: 24%; Female: 12% Male: 7%; Female: 12% High income: 22% Male: 6%; Female: 14%, Northeast: 18% Middle income: 21% Northeast: 15% Male: 7%; Female: 17% Male: 4%; Female: 12% Northeast: 12% Male: 7%; Female: 13% Male: 5%; Female: 12% Base : n=403 working, n=410 retired Q.28 Working: Which activities and projects would most interest you when retired?Retired: What kind of activities do you do since you retired? [SPONTANEOUS PRE CODED QUESTION]

  19. Working Retired 4. Which activities are most popular among retirees? (1/3) Both retired and working Americans alike are among the most interested in travelling and sports. These are their two main aeas of interest, unlike other countries. Accordingly, hobbies are more secondary in the U.S. than elsewhere, where they rank in ninth position. A hobby, a particular interest Sport Travel In %

  20. Working Retired 4. Which activities are most popular among retirees? (2/3) In the United States, compared to other countries, people show relatively little interest for home activities – gardening or do-it-yourself activities – or voluntary work and cultural activities. Cultural interest,Reading + back to college / studies Voluntary work + join associations Gardening / DIY In %

  21. Working Retired 4. Which activities are most popular among retirees? (3/3) The same is true for activities such as walking/hiking, family, social life or excursions. Go on day/trips/visits Walking / hiking Visit the family + social life In %

  22. YES NO 5. For how long do people go on vacation? One out of two workers/retirees go on vacation. Retirees tend to go on longer vacations than the working population. Overall, older retirees travel more, but income is an important factor in taking vacations. Working Retired Did you go on vacations? % % % % Socio-demographic analysis 45-64 years: 51%, 65-75 years: 60% How many days? 16 days 35 days Base : 219 working go on vacations Base : 232 retired go on vacations Base : n=403 working, n=410 retired Q.8 Working and Retired : Have you been on holiday in the last twelve months, i.e. have you spent more than 5 days away from home? Q.9 Working and Retired : How many days have you spent on holiday over the last twelve months?

  23. Working Retired 5. For how long do people go on vacation? Working or retired Americans alike take fewer vacations than Europeans. Working Americans tend to take short vacations, while retirees stay away for a longer time. Did you go on vacation this year? How may days? In % of « YES » Number of days 25 days 36 days 22 days 33 days 21 days 36 days 21 days 31 days 19 days 31 days 19 days 27 days 19 days 25 days 19 days 24 days 17 days 22 days 17 days 18 days 16 days 35 days 13 days 30 days 13 days 26 days 12 days 23 days 9 days 11 days

  24. Working Retired 6. What role should retired people play? There is a wide consensus on the role of retirees in society and the family. Offering financial support to family is largely accepted as part of this role. In % « YES » Socio-demographic analysis 25-44 years: 96%; 45 years and more: 91% To look after their grandchildren Knowledge and life experience transfer To get involved in community life / join associations To help financially their children / grandchildren Middle income: 94%; High income: 92% Male: 78%; Female: 85%; High income: 91% Northeast: 84%, Midwest: 85% Northeast: 81% Base : n=403 working, n=410 retired Q.29 Working and Retired: What role should retired people play? [AIDED QUESTION]

  25. Working Retired 6. What role should retired people play? (1/2) For Americans, retirees have a major role to play by transmitting their knowledge and experience: this seems to be a global consensus, except in the Netherlands. Beyond that, involvement in community life ranks as importantly. To get involved in community life Knowledge and life experience transfer In % of “YES”

  26. Working Retired 6. What role should retired people play? (2/2) Other values emphasized in the U.S. include looking after their grandchildren and helping out financially. To help financially their children / grandchildren To look after their grandchildren In % of “YES”

  27. Working Retired 7. How should children support their retired parents? Strong family solidarity: very wide consensus on a child’s duty to offer moral support to his or her elderly parents. Less emphasis is placed on the duty to provide financial assistance, except among low incomes and younger workers. In % of «YES » Socio-demographic analysis Presence, regular visits Material aid other than financial Financial aid Male: 75%; Female: 64%; 25-44 years: 76%; 45 years and more: 63%; Low income: 80% 25-44 years: 46%; 45 years and more: 34%; Low income: 54% Base : n=403 working, n=410 retired Q.32 Working and Retired: Do you think children should support their retired parents by…? [AIDED QUESTION]

  28. Working Retired 7. How should children support their retired parents? While material and financial support to older parents is seen as a moral and emotional duty for Americans as in other countries, it is slightly less emphasized than in other countries. Material aid other than financial Financial aid Presence, regular visits In % of “YES”

  29. Working Retired 8. Can retired people rely on their family in case of illness? Families would show solidarity in the event of illness. In % of “YES” Socio-demographic analysis - Low income : 64% Male: 69%; Female: 81% 45-64 years: 68%; 65-75 years: 78%; - Low income: 68% Base : n=403 working, n=410 retired Q.31 Working: Having retired, do you think you could rely on your family if you became ill? Retired: Do you think you could rely on your family if you became ill?

  30. Working Retired 8. Can retired people rely on their family in case of illness? Just as in other English-speaking countries, family support is strong in the U.S. However, it is not quite as strong as in southern European countries. % who think that they will be able to rely on their family in case of illness In % of « YES »

  31. Working Retired 9. At what age do people consider somebody as old?We become “old” later: for those who still work, starting from 73 years of age, and even later for retirees, at 75! Working Retired Average age Male: 72 years; Female: 75 years 25-44 years: 73 years 45 years and more: 75 years Midwest: 75 years High income: 74 years 73 years 75 years Male: 74 years; Female: 76 years Midwest: 76 years High income: 75 years Base : n=403 working, n=410 retired Q.33 Working and Retired: In your opinion, is somebody old when aged … ?

  32. Working Retired 9. At what age do people consider somebody as old? Broad consensus worldwide on the age at which “people grow old”. Retired Working

  33. Working Retired 10. What are the factors that signify getting old?Retirement is not synonymous with age. Illness and loss of mobility are the true signs of old age, much more than the number of years. Socio-demographic analysis In % Loss of mobility, autonomy Illness Pains Loss of independence Retirement Loss of memory Loss of energy / vitality No longer working To become grandparent None Do not know Midwest: 43% Middle income: 23%; High income: 23% Male: 26%; Female: 34%, Middle income: 33%, High income: 30% Male: 8%; Female: 4% Base : n=403 working, n=410 retired Q.35 Working and Retired: What are the factors that signify that you are getting old? [SPONTANEOUS PRE CODED QUESTION]

  34. Working Retired 10. What are the factors that signify getting old? In the U.S. as elsewhere, old age is barely or hardly associated with retirement. It is mainly symbolized by disease and loss of autonomy. Loss of independence Loss of mobility / autonomy In % Retirement Illness

  35. Working Retired 11. What would be the ideal living arrangement during retirement? Workers dream more of moving away: this wish is stronger among under-45s and men. For retirees, on the contrary, staying at home is the ideal arrangement. There is some attraction to residence complexes for retired people, mostly among retired women. In % Socio-demographic analysis 25-44 years: 62%; 45 years and more: 81% Staying at home Moving to another region or another country or the countryside Going to a residence complex for retired people Going to an assisted living residence Going to your children’s home 45-64 years: 73%; 65-75 years: 81% Male: 28%; Female: 19%; 25-44 years: 31%; 45 years and more: 15% West: 34%, Low income: 30% 45-64 years: 19%; 65-75 years: 11%; West: 21% Male: 3%; Female: 8% Base : n=403 working, n=410 retired Q.26 Working and Retired: From the following options, what would be your ideal living arrangement during retirement? [AIDED QUESTION-ONE ANSWER]

  36. Working Retired 11. What would be the ideal living arrangement during retirement? Some working Americans, as everywhere else, dream of spending their retirement in another region. In reality, they spend their retirement at home. In % Going to a residence complex for retired people Going to your children’s home Moving to another region or another country or the countryside Staying at home In %

  37. 12. Where do retired people live most of the time?An overwhelming majority of retired people live at home. At home, in your house / flat You share your time between two places In a residence complex for retired people At your children’s home Socio-demographic analysis In % Retired Male: 1%; Female: 4% Base : n=410 retired Q.27 Retired: Where do you live most of the time?

  38. 12. Where do retired people live most of the time? Like everywhere else in the world, except in Hong Kong, American retirees live at home. At home, in your house / flat At your children’s home In % Retired

  39. Higher As high Lower 13. Is or will your retirement income be higher, as high or lower than your last salary? For a large majority, retirement income is lower than wages earned when working, especially among lower income earners. Young working men are more optimistic than the others. Working Retired % % % % % % Socio-demographic analysis Socio-demographic analysis Male: 23%; Female: 16% 25-44 years : 26% 45 years and more: 13% High income: 22% Low income : 89% High income : 17% Low income : 72% Base : n=403 working, n=410 retired Q.14 Working: Do you think that your retirement income will be higher, as high or lower than your last salary? Retired: Is your retirement income higher, as high or lower than your last salary?

  40. Working Retired 13. Is or will the retirement income be higher, as high or lower than the last salary? Americans are among the least pessimistic about changes to their retirement income. In % “lower retirement income”

  41. 14. What standard of living do you anticipate in retirement? Two out of three workers believe their standard of living will improve or remain the same. This perception accurately reflects the reality experienced by retirees. Working Retired % % % % % % Will be improved/has improved Will remain the same/remained the same Will decrease/decreased Socio-demographic analysis Socio-demographic analysis Male: 23%; Female: 35% Low income: 60% 25-44 years: 27% 45 years and more: 41% South: 39% Low income: 56% High income: 28% Base : n=403 working, n=410 retired Q.15 Working: Do you think that your standard of living will be improved, will remain the same or will decrease after you retire? Retired: Do you think that your standard of living has improved, remained the same, or, decreased since you have retired?

  42. Germany France UK Hong Kong Japan Singapore Italy Portugal USA Australia Belgium The Netherlands New Zealand Working Spain Retired 14. What standard of living do you anticipate in retirement? A significant percentage of American workers and retirees are positive about changes to their retirement lifestyle. Decreasing Improvement Stability The Netherlands Belgium Canada Japan New Zealand Australia USA UK Portugal France Canada Italy Germany Spain Singapore Hong Kong

  43. 15. Will your retirement income be sufficient?Retirement income is seen as sufficient for six out of every ten workers or retirees. Working Retired In % 62% 61% Completely sufficient Sufficient Insufficient Completely insufficient Do not know 38% 35% Socio-demographic analysis Socio-demographic analysis Male: 12%; Female: 6% Male: 69%; Female: 54% Middle income: 65%; High income: 74% Middle income: 55%, High income: 73% Base : n=403 working, n=410 retired Q.17 Working: Do you think that the amount of your retirement income will be…Retired: Do you consider this amount to be…

  44. Working Retired 15. Will your retirement income be sufficient? American retirees, and retirees in most countries, are satisfied with their current retirement income. At the same time, the working population is optimistic. In % “Completely sufficient+ sufficient”

  45. 16. What is the total of your retirement income?Those who work are not well informed of their future retirement; those over 55 are better informed. The current amount of retirement income practically meets needs. Working 26% know the amount of their future retirement income High income: 34% Retired $2,198 Average amount needed per month for household expenses $1,993 Average amount of retirement income per month Male: $2,452 ; Female: 1 889 $ Northeast: $3 035, Low income: $1,279 Middle income: $2,181; High income: $3,385 $1,637 $1,412 Median amount of retirement income Median amount needed for household expenses 28% Do not know/ No answer Do not know/ No answer 20% Q.16 Retired: What is the total net monthly amount of all your pensions? Q.18 retired: How much would you need per month for your household expenses? Base : n=403 working, n=410 retired

  46. 16. Do working people know their future retirement income? American workers are among the most informed about the amount of their retirement income, just as the Germans and the Dutch. On the opposite end are the French, Portuguese and the Spanish. In % of “YES” Working

  47. 16. What is the total of your retirement income? American retirees enjoy a relatively high retirement income, compared to other countries. They believe income will meet expenses (which is not the case in several other countries).

  48. How do people prepare for retirement ?Working population versus retired people

  49. Working Retired 1. At what age do people prepare for retirement? Retirement calls for preparation early on and most working people have already begun this. The degree of preparedness is strongly correlated to income level. Average age Socio-demographic analysis Male: 33 years; Female: 35 years 55 years and over : 36 years years years 45-64 years: 34 years; 65-75 years: 38 years Northeast: 38 years; Midwest: 38 years Low income: 38 years; Middle income: 39 years In % 25-44 years: 68%; 45 years and more: 79% Northeast: 78%; Midwest: 83% Base : n=403 working, n=410 retired Q.20 Working: At what age do you think people start preparing retirement? Q.20 Retired: at what age did you start preparing for your retirement? Q.21 Working: Have you prepared for your retirement?

  50. Working Retired 1. At what age do people prepare for retirement? As in most countries, America’s workers think that they must start planning for retirement earlier than their elders did. They rank first among all workers in planning ahead, contrary to southern Europeans and the Japanese. % having prepared for their retirement Actual age for preparing (average)

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