There are significant differences between gender and age groups when it comes to responding to financial hardship caused by unforeseen events. Older Americans are more likely to sell assets.
There are significant differences between gender and age groups when it comes to responding to financial hardship caused by unforeseen events, according to HSBC.
In the HSBC The Future of Retirement: A new reality study of 15,000 people ages 25 and older in 15 countries around the world, the life event with the biggest impact on peoples’ ability to save for retirement was buying a home/paying a mortgage (36%), which even beat becoming unemployed (28%).
Older respondents are more likely to sell their assets, like their main home or other property, than younger respondents. Overall, though, only 23% would consider selling their valuables if needed and 40% would tap into non-retirement-based savings and investments if they were experiencing financial hardship.
"Homes can be an emotive investment and people's unwillingness to unlock their equity during times of hardship is understandable,” Andrew Ireland, Head of Premier and Wealth, HSBC Bank USA, N.A., said in a statement. “But unless people plan ahead, they may be faced with no alternative."
For all Americans, looking for lending options was not a very popular option as only 14% would borrow money and 17% would ask family and friends for help.
The survey also revealed that men were more likely than women to consider dipping into their retirement funds. Nearly one-third of men (31%) said they might do so to cope with tough times as a result of unforeseen events compared to just 23% of women.
Only 14% of American men would consider downsizing to a smaller house, while 26% of women would consider it to deal with financial difficulty, the survey found.
"Well-intentioned but erratic saving is understandable in the current economy, but may curb people's ability to cope with unforeseen events in their lives, like losing a job or falling ill,” Ireland said. “People need to take a new and more robust approach when it comes to financial planning. Regular saving will put them in a stronger position to cope with the unexpected, and help to maintain living standards later in life."