HSBC: Yuppies unmindful of retirement reality

CEBU, Philippines - Hong Kong Shanghai Banking Corporation (HSBC) is encouraging the young batch of professionals otherwise known as the millennials to wake up to retirement reality.

“While millennials are broadly aware of the economic and demographic challenges they face, they do not appear to have grasped the full implications for their retirement," said Charlie Nunn the bank's group head of wealth management.

With low interest rates, rising healthcare costs and potentially less state support for retired people in the future, it has never been more important to save for a comfortable retirement, Nunn said.

"Starting to save early – and saving enough – can reduce the need to have to continue working in later life," he added.

In the Philippines, while millennials seem to be aware of their future needs, it still doesn't seem to translate to regular savings and investment, according to a study recently conducted by a multinational insurance company.

Filipino millennials in general seem to pour out their savings to spending that provide instant gratification, such as travel or gadgets.

Despite the increasing confidence due to employment security and increasing purchasing power, what millennials need to realize, HSBC suggested, is the need to save before the spend, and the time to start is now.

According to HSBC’s latest survey, only one in 10 expects to work past 65.

Clearly, most millennials according to the survey, have an unrealistic view of their retirement prospects.

The millennials are seen as having the worst retirement prospects of any generation. Ten percent of people around the world think millennials are in the best position to have a comfortable retirement, while 42 percent see baby boomers as best placed.

The survey of over 18,000 people in 16 countries finds that only 10 percent of millennials expect to continue working after 65 – even as their generation faces unprecedented financial pressures and state retirement ages continue to rise around the world.

This despite 59 percent of millennials agreeing they will live much longer and will need to support themselves for longer than previous generations. (FREEMAN)