Road to Better Outcomes: Survey Highlights

2023 MFS® Global Retirement Survey
The Road to Better Outcomes

John Barry:

Hello, my name is John Barry from the MFS Investment Solutions Group, and I'm excited to share with you today some of the key highlights from our fourth annual global retirement survey. The survey polled over 4,000 participants from the US, Canada, UK, and Australia to get insights on key issues that are top of mind for participants. The survey covers a number of key themes, including how recent events have impacted participant decisions, retirement confidence, participant views and advice, retirement income, target date funds, and finally sustainable investing.

With me today is Jeri Savage, who leads our retirement research efforts at MFS. Jeri, I know you've been spending the last few weeks digging into the survey data. What are some of the key themes you're seeing that are top of mind for participants globally?

Jeri Savage:

So notably, we're seeing a lot more similarities than differences. The survey revealed that participants and members across all four countries have been negatively affected by market events and that the inflationary environment is causing concern. So there's a general consensus that because of the last few years, people now feel that they will need to work longer than they planned, save more than they planned, and some even feel that they may not be able to retire at all. Directionally, these answers are very consistent globally.

New this year, we also see that the inflationary environment is a global concern for participants and members. Anywhere from 59% to 61% of respondents in each country say that the recent increase in inflation has caused them to think differently about their retirement and their retirement savings. When we look through to what actions people may have taken as a result, we find that it's more likely that people have changed their investments to become more conservative.

John Barry:

That's interesting. As I mentioned, this is our fourth year during the surveys, so have you seen any trend over the past few years in terms of retirement confidence?

Jeri Savage:

So not surprisingly, based on what we just talked about, participants and members feel negatively about the recent market events and that translates into a decline in overall retirement confidence. So in the US for example, we find just 34% of people are confident that they'll be able to retire at the age that they want to. In the UK and Australia, they were the least confident at 25% and 26% respectively, while Canada was more in line with the US at 31%. Those numbers have declined since last year's survey results.

In the US, we also asked a few questions and found that people have competing priorities. So those financial obligations can get in the way of saving adequately for retirement. There's been recent legislation in the US to try to help with some of these issues, but we definitely see concerns translating into a decline in retirement confidence.

John Barry:

So we've got declining confidence. We've got competing priorities. How are people actually seeing their retirement playing out given all this?

Jeri Savage:

Yeah. I would say across all countries, roughly two thirds of people now expect to have a more gradual transition into retirement rather than that hard stop that we think about. We define that as reducing hours or switching jobs, and it suggests that that traditional view of retirement may no longer resonate with people.

Why should we care about this? Well, the sentiment around a gradual transition rather than a hard stop, can have implications for workforce management. For example, policies that allow employees to gradually wind down before retirement. There might be an opportunity for better workforce transition for both the retiree and for the new person coming in.

John Barry:

So another theme that the survey digs in on is around advice and how participants currently access advice and how they might like to access advice in the future. So are you seeing any differences across countries in terms of how people are viewing advice?

Jeri Savage:

Yeah, absolutely. We see differences in preferences of how people indicate they'd like to receive retirement advice. We see differences globally. We see it by gender and we see it by generation. So for example, we see strong use of financial advisors in the US and Canada, whereas in the UK and Australia, they're more likely to rely on their employer for advice or the superfund. We see preferences emerge between men and women when it comes to advice. Men are more likely to leverage online resources, for example, while women are more likely to heavily rely on family and friends.

I would say importantly though, these varied responses and various sources of advice show us the importance of recognizing that there are different preferences out there and it's an opportunity for employers to try to meet their employees where they are and recognize the value in having different sources of advice.

John Barry:

So another area we ask questions on in the survey is around retirement income. So what are participants looking for in terms of retirement income and are plan sponsor is ready to meet them there?

Jeri Savage:

So I think we have to acknowledge that retirement income is complicated, it's going to be unique for each and every individual, and we have puzzle pieces that need to fit together to have a successful retirement outcome. In the survey, we asked people what they'd like to see in a possible retirement portfolio, and we found that globally there's an emphasis and a desire for predictability. So over 70% in each country said that receiving a predictable stream of income payments throughout retirement was one of their top three priorities, and it was also consistently rated as the number one priority in all markets.

John Barry:

All right. Well, thank you Jeri. As you can see, there is really a lot to unpack there. We've really just scratched the surface of some of the great insights that the survey provides. So for more details, reach out to your MFS contact or visit mfs.com/dc. Thank you and have a great day.

 

The views expressed herein are those of the MFS Investment Solutions Group within the MFS distribution unit and may differ from those of MFS portfolio managers and research analysts. These views are subject to change at any time and should not be construed as the Advisor’s investment advice, as securities recommendations, or as an indication of trading intent on behalf of MFS.

 

Distributed by: U.S. – MFS Institutional Advisors, Inc. ("MFSI"), MFS Investment Management and MFS Fund Distributors, Inc., Member SIPC; Canada – MFS Investment Management Canada Limited.; Note to UK: Issued in the UK by MFS International (U.K.) Limited ("MIL UK"), a private limited company registered in England and Wales with the company number 03062718, and authorised and regulated in the conduct of investment business by the UK Financial Conduct Authority. MIL UK, an indirect subsidiary of MFS®, has its registered office at One Carter Lane, London, EC4V 5ER.  Australia- MFS International Australia Pty Ltd ("MFS Australia") (ABN 68 607 579 537) holds an Australian financial services licence number 485343. MFS Australia is regulated by the Australian Securities and Investments Commission.

 

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