Retirement Dreams and Realities

1. Introduction

As a leading supplier of financial protection for individuals and businesses worldwide, AXA constantly seeks to broaden its understanding of retirement issues and challenges. AXA conceived and sponsors the AXA Retirement Scope, a unique and valuable research project, as part of this multifaceted, ongoing effort.
The goal is to understand how attitudes and behaviour compare and contrast in various national contexts among both working people and retirees. Now in its third year, the AXA Retirement Scope offers comprehensive information and insight into attitudes towards retirement on both national and transnational bases.
The results of this ambitious project are of obvious value to us at AXA as we refine and develop our continuously evolving portfolio of products and services for both individual and institutional clients. We are convinced that the AXA Retirement Scope results offer valuable insights for external audiences as well — from concerned individuals of all ages to researchers, economists and people involved in developing public policy. Enhancing awareness of these long-term issues is also one of the key elements in our sustainable development strategy. Finally, we seek to provide perspectives and food for thought for our clients, as they examine their individual retirement dreams and expectations.

2. Methodology

The independent research for the AXA Retirement Scope was designed and conducted worldwide by the Custom Research division of GfK, one of the world’s leading market research organizations, which also tabulated and validated the results. In each geography, field work was carried out by one of each country’s leading market research organizations.
For the third annual survey, a total of 11,590 people aged 25 to 75 were questioned, via telephone, in 16 countries. In 14 of them, the sample consisted of about 300 working people and 300 retirees, representative of the national population. In China and the U.S., the samples were enlarged, to 2000 and 840 respectively. The 2007 edition of the AXA Retirement Scope survey was the first to include China. To adapt the survey methods to the world’s most populous country, the research was carried out in five urban areas, with 400 interviews each conducted in Beijing, Shanghai, Guangzhou, Chongqing and Tianjin.
In 2007, the survey covered Australia, Belgium, Canada, China, France, Germany, Hong Kong, Italy, Japan, the Netherlands, New Zealand, Portugal, Singapore, Spain, the UK and the US. The 20-minute telephone questionnaires were conducted between July and September 2006.

3. Active Approach

The AXA Retirement Scope survey results show that, against a backdrop of disparate dreams and aspirations among people of different ages, in different circumstances, with different cultures, the desire for a long retirement period is universal. As attitudes towards aging evolve, men and women nearly everywhere tend to see people in their 60s and 70s as vigorous and fit to live active lives. At the same time, the results show no corresponding desire to extend working years. Instead, there is a growing aspiration for relatively early retirement.
The 2007 results confirm the findings of previous research: those who live an active retirement period find their retirement years more satisfying than those who assume a passive attitude. The active approach begins well before people actually leave the workforce, rooted in the active planning for retirement that begins as much as four decades before people actually retire. The survey results show that those who think about retirement early and project themselves into the future are most likely to undertake the financial planning that will enable them to realize their retirement dreams.
The evolution of attitudes since 2004 shows that working people are beginning to plan younger in their lives. In 2004, the average age at which working people began making preparations for retirement was 38.4 years old. The 2007 survey reveals a more active approach; working people already planning for retirement reported that they had begun before their 32nd birthday.
Implicit in the active approach is the conviction that individuals must assume responsibility for their retirement years. In fact, the increasing weight of individual responsibility counts as one of the most striking contrasts between retirees and younger generations. The comparison shows that nearly everywhere, younger generations increasingly believe they must, as individuals, take on responsibility for their own retirements. It is not that people see a lessened role for government or employers. While there are widespread expectations of pension reform and reduced pension benefits, government and employer pension plans remain among the cornerstones for financing pensions virtually everywhere.
What is changing is that the individual role is tending to become as important as the institutional one. Among the youngest age bracket surveyed, 25-to-34 year olds, the results show that people see nearly equal responsibility for pensions between the individual and government. As individuals assume more responsibility for financing their own pensions, they are likely to assume more of the non-financial responsibility as well. It is hard to imagine how those who put aside some of their earnings (and, importantly, enjoy sufficient income to be able to do so) will not project into the future. As they anticipate their future lifestyles and activities, tomorrow’s retirees are also setting the stage psychologically. This active approach can only be beneficial. As people assume more of the responsibility for retirement in every way, it is not unrealistic to believe that future retirees will live, each according to his or her individual aspirations, more satisfying, fulfilling lives.

4. Principal Findings

In 1970, the average retirement period for men living in the 30 OECD countries was only ten years. Today, as the results of the AXA Retirement Scope survey demonstrate, the length and nature of the retirement years have changed dramatically. In contrast to the sedentary past, retirement now accounts for fully one quarter of people’s lifetimes. What is more, it is a time when people are generally fit, healthy, energetic and eager to get the most out of life.
Not only are people living longer, but today’s retirees typically left their jobs at a relatively early age. One-quarter of the more than 5,000 retirees questioned for the 2007 survey said they retired before age 55. Nearly 85% retired prior to their 65th birthday.
In recent years, perhaps because of lower birthrates and longer life expectancies, the trend toward ‘early’ retirement has been reversed. Working people in the16 AXA Retirement Scope countries seem to be fully aware of the change and have adjusted their expectations accordingly. Only about half of the working people surveyed in 2007 said they expected to retire before 65.
Improved health, education and living standards have also driven a sharp change in the way people approach and experience aging in general, especially those closest to retirement age. The AXA Retirement Scope survey results show that older working people (aged 55+) and older retirees (aged 65+) both put the onset of old age at 76 years old. When compared with the average age of retirement for survey participants — 57.7 — that translates into a period of more than 18 years between retirement and old age, a period during which people can be energetic and active, a period described by one observer as ‘the bonus years’.

Summary of the AXA Retirement Scope 2007 Report. For more information:

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