The Possibility of Never Retiring

Nearly one-fifth of Americans expect they will never be able to completely retire, according to the sobering findings of a new HSBC report.

The “Life After Work” report from HSBC revealed that 18% of working-age Americans and 12% internationally expect that circumstances will require them to work indefinitely. And the numbers are even bleaker for those living alone. The survey of 16,000 people in 15 countries and territories found that 33% of divorced or separated Americans believe they will never be able to retire.

"While some people still regard a comfortable retirement as a natural entitlement, for a large number of Americans this is no longer the case,” Andrew Ireland, Regional Head of Wealth Management, HSBC North America, said in a statement.

Of current retirees, 44% of Americans said they had not prepared adequately, or at all, for a comfortable retirement, which beats out the 38% globally. Less than half (43%) actually realized they were underprepared after retiring.

Furthermore, 12% of Americans who are currently retired but admitted to not being prepared said they would be forced to go back to work to cover their financial shortfall. Given the data, HSBC suggests not rushing into retirement, especially since 64% of those who entered semi-retirement expressed that they wished they had stayed in full-time employment longer. The regret is only monetary though — retired people see working as a means of keeping the body and mind active.

HSBC also recommends relying on multiple sources of retirement income, spreading income and associated risks out. This will be especially important as half of current workers expect to have some financial responsibilities towards others, like family, even after they retire.

Lastly, HSBC found that people shouldn’t assume their income needs will fall during retirement. Half (52%) or retirees reported no reduction in their outgoings and 17% actually saw their outgoings increase.

“Today's workers should prepare for retirement as early as possible to have some certainty later on,” Ireland said. “Life is full of reasons to prioritize short-term spending over longer term planning, but the sooner people start saving, the less likely they are to have to rely on working in retirement."