Today, the Aegon Center for Longevity and Retirement (ACLR) shared its latest research with visitors to the OECD Forum Discovery Lab.
For the fifth year The Centers research measured people's attitudes and readiness for retirement in 15 countries and shows that the world needs a wake-up call when it comes to preparing for retirement.
The research shows only marginal improvements since its launch in 2012 when it comes to retirement readiness. In a co-creation session during the OECD annual forum in Paris, participants from all over the world shared ideas to resolve this global retirement lethargy.
One of the most important pieces of advice from OECD Forum visitors is that through greater inclusion of women in retirement preparations, a large part of the retirement challenge could be solved.
"The challenge for governments, individuals and employers is to find the right mix of provisions to ensure that aging population will have the resources to achieve a lifetime of financial security," said Catherine Collinson, President of Transamerica Institute & Executive Director, Aegon Center for Longevity and Retirement.
Participants in the co-creation session heard that lack of retirement security is set to further intensify. By conservative estimates, there will be more people over 60 years of age by mid-century than were on the planet one hundred years ago and that a solution to finding a sustainable and inclusive retirement system is a shared responsibility.
Armed with these facts, a brainstorming session with OECD-participants resulted in various recommendations for governments, the private sector and individuals:
Important to include women to solve retirement problem
Women are often behind in their preparations for retirement compared to men. Generally speaking, they are more likely to take time off from the workplace to take care of their family. They are also more likely to work part-time and therefore they save less because these contracts are not always eligible for workplace pension plans. Furthermore, their spouse is more likely to take the financial decisions for the family, which might not be the best decision for women.
OECD Forum visitors believed that if women were more freely included in retirement preparations, a large part of the retirement challenge could be solved. They suggested that governments could provide credits for caregivers and household education programs.
Governments should encourage women to be more involved in their home finances. They should encourage employers to provide auto-enrollment programs to women and part-time workers.
Lastly, the private sector should make it easier for people to plan and save for retirement, by removing financial jargon and providing financial education.
Start saving from an early stage in life
When people are starting out in their career, saving for retirement is not usually a top-priority. In addition to earning less, they also have conflicting financial priorities such as repaying student loans, buying a house or starting a family.
OECD Forum visitors believed it is very important that people begin saving from the very start of their career, even if they save just a little. Creating a written plan for the future, is one of the most important steps that people can take to achieve their retirement goals.
Children learn about retirement
In the discussion, the participants believed that financial education should start at a young age and in schools. People might not realize that they are going to live longer than their parents.
Governments should provide education campaigns to make even the very young aware that they will have to save early for retirement.
Financial companies should also provide innovative digital tools to make retirement products easy to understand and encourage saving behavior among children and youngsters.