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Schroders Global Investor Study 2018 – Are you saving enough for a comfortable retirement?

It goes without saying that people would like to retire in comfort, and many strive to save and invest effectively during their working life to ensure a certain lifestyle for their golden years. How successful are people globally at achieving this?

We spoke to over 22,000 people from 30 countries to explore financial expectations for retirement and how these compare to the experiences of people who have already retired.

Key insights for Australians include:

  • Australians expect to spend an average of 39% of their retirement income on basic living expenses — but the reality is retirees require 58%.
  • Working Australians feel they should be saving 15% of their current income for a comfortable retirement, but they only save an average of 12%.
  • In Australia, 61% of retirees state they do not have enough, or could do with more income to live comfortably.
  • Australian retirees currently live off 52% of their final salary as an income. This compares to 71% of final salary which working Australians feel they will need in retirement.

Explore the Global Investor Study

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Blow-out, or blow-up: Why risk still matters

Despite a frenetic start to 2018, much of the trajectory of markets is as expected and forecasts are unchanged for the medium term. However, with indicators that core inflation is rising — particularly in the key US market — it remains to be seen how policymakers will deal with this issue, and also how it will affect investor perceptions about the prices they pay for assets.

Separately, the sovereign bond markets have had a shaky start to 2018 and while we’ll hold back on saying there’s a start of a bear market on bonds, there are two ways it could go — to blow out, or blow up. A blow out would come as gains accrue in the absence of a market shock, like inflation. A blow up could occur with anything that challenges the fundamental macro and policy support for the market, including a growth shock from China, a pick up in wages or inflation, or central banks being slow to respond to inflation.

The near euphoric sentiment evident in January was a good precursor to February’s re-pricing. The bigger risks though are fundamental, and rising inflation is a legitimate cause for caution.

Read full insights here

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3 critical issues for investors today

Markets are enjoying a cocktail of somewhat synchronised global economic growth, positive but low inflation and central banks with their feet still on the accelerator. This is a potent mix that will require investors to focus on some important but interconnected areas.

Read full article here

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