(MENAFN- Khaleej Times) While an increasing number of residents in the UAE today feel more confident about their future financial prospects, experts have stressed that residents need to start saving early for their lives after retirement.
"Retirement can mean different things to different people. While some may view this as a time to relax after a lifetime of work and spend time with their families, others may choose to use this as an opportunity to experience things they never had a chance to when they were younger. Whatever their aspirations, developing a long-term financial plan will go miles in helping working age people maintain a comfortable standard of living in retirement," said Khalid Elgibaly, head of retail banking and wealth management for the UAE and Mena region, HSBC Bank Middle East.
HSBC on Monday launched its 'The Future of Retirement: A balancing act' global report, which revealed that the majority of UAE residents are facing the prospect of a shortfall in their retirement savings as major life events and the high cost of living are holding them back from preparing for life after work.
The 2015 report explores the results of a survey of more than 16,000 people across 15 markets, including the UAE; assesses retirement trends globally; and identifies the key issues people have to deal with in their lives after work.
The report said that for nearly nine in 10 people in the UAE, saving for retirement is not a main priority.
As a result of this, more than half (55 per cent) of the working age population feel inadequately prepared for life after work as they did not start saving early enough - the highest proportion globally to express this sentiment.
Elgibaly said: "Alarmingly, we see that in addition to rising costs and life events, a lack of understanding about how much to save is also hindering people's ability to prepare for retirement, with one in five (20 per cent) citing this as a barrier to their plans.
"People looking to understand how much they need to put aside need to first look at how long they expect their retirement to last and what standard of living they want to maintain. It is then critical to start saving as soon as possible; even if it is a little each month, this can reap significant dividends in the long-term. Meanwhile, speaking with financial advisors can also help working age people make investments commensurate with their financial situation and risk appetite."
HSBC's research shows that saving regularly and investing early produces results. If an individual starting at age 35 invests $1,250 a month for 25 years, their final retirement pot can add up to over $855,000 with premiums totalling $375,000. However, if an individual starts saving at age 45 and puts aside the same amount each month for 15 years, their final retirement pot will be less than $360,000 with premiums totalling $225,000.
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