- The Washington Times - Sunday, June 20, 2004

NEW YORK (AP) — Despite a recovering economy, people around the world are pessimistic about their financial security in retirement.

In eight of the 12 countries surveyed in an annual gauge of financial attitudes, the number of people who expect to be worse off in retirement has increased this year. The study was commissioned by Principal Financial Group Inc., which provides pension services.

“This trend is more of a deep-seated one than we had hoped,” said Norman Sorensen, president of Principal International, a division of Principal Financial. “There’s lingering concern around the world about three years of a weak market” and this isn’t going to dissipate overnight, he said.

The survey, conducted earlier this year by NOP World and Harris Interactive, covered the United States, Brazil, China, Chile, France, Germany, Great Britain, Hong Kong, India, Italy, Japan and Mexico.

Lack of confidence in company-sponsored retirement plans and government benefits are common denominators behind the gloomy attitudes. In general, even though people believe that it is important to put aside money, many of them doubt they will be able to take care of basic expenses in retirement.

In most countries, workers are skeptical that employers will deliver on the retirement benefits promised. This mistrust is highest in Japan, where only 36 percent are somewhat confident that they will receive the money to which they are entitled from their company’s retirement or pension funds.

Confidence in governments also is low. Many people around the world expressed concern about government-provided health insurance or pensions. In China and India, though, the majority of people feel that the government is doing its job to help them achieve a secure retirement.

The paradox is this: In most countries, four out of five workers say they are doing well in ensuring financial security, yet many don’t know their life expectancies or how much they will need to retire comfortably, the study said.

In the United States, the average 35-year-old white man is expected to live until the age of 77, and the average 35-year-old woman is expected to live to 81, according to the Centers for Disease Control and Prevention in Atlanta. These numbers have been creeping up for years.

In retirement planning, Americans have a substantial lead, with about 76 percent of people already having done some work. By comparison, 33 percent of Brazilians have started, the lowest level of all the countries surveyed. Still, both Americans and Brazilians said they were very concerned about their financial future.

“A little pessimism when you’re saving for retirement isn’t necessarily a bad thing,” said Ed Ferrigno, vice president of the Profit Sharing/401(k) Council of America, because then people can’t get too complacent.

India and China came in with the highest percentage of adults who are confident that they will have enough money in retirement. This is partly because the majority of people in these countries expect to receive support from family members, or to live with relatives, when they retire.

The Principal survey included a poll of at least 500 people in each of 11 countries during February and March, as well as U.S. data pulled from earlier research by Principal and the Employee Benefit Research Institute in Washington.

The margin of error was plus or minus five percentage points.

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