Saving for retirement involves a trade-off -- you have to forgo spending today and instead invest money for the future. But when given a choice, most workers around the world favor immediate gratification over retirement security.
Most people, no matter where they live, would take a salary increase over all other benefits, according to a new survey of more than 10,000 people worldwide by the research arm of global consultant Mercer. And in 7 out of 10 markets, an additional week of vacation time ranks as one of the top three preferred benefits.
"The value of paid time off to a lot of employees is the immediacy of the benefit," says Dave Rahill, president of Mercer's global Health & Benefits business. "We don't think employees are making the best choices in the world when they're taking that immediate benefit and valuing it over a long-term benefit."
In 4 out of 9 markets, workplace retirement plans do land in a top three spot -- in the U.S., Canada, Brazil and Italy.
Yet the prospect of not having enough money to last through retirement is a universal concern for two-thirds to three-quarters of workers in most places. Just 61 percent of Spanish workers expressed retirement concerns -- likely because they are more focused on maintaining their current jobs than worrying about the future, according to the study.
Retirement readiness around the world
concerned about retirement
less than 10 percent of pay
Interestingly, there's a strong correlation between the percentage of workers who are concerned about having enough money in retirement and the percentage of those who are saving less than 10 percent of their pay. For instance, 74 percent of U.S. workers are concerned about retirement, and 72 percent save 10 percent or less for retirement.
That's not true in the Far East. In China, for example, 81 percent of workers are concerned about retirement, yet a whopping 55 percent save more than 10 percent of their pay. Their top three preferred benefits are commutation assistance, housing allowance and a savings plan, according to the survey.
We could learn a lot about retirement planning from the Chinese.
Follow me on Twitter: @BWhelehan.