- Hans Weber
- January 30, 2023
Young Czechs underestimate preparation for retirement, only half of them save
It is very short-sighted to rely on the state pension to get you through retirement. Many Czechs, even those under 35, are well aware of this. However, only about one in two is putting money aside when they are not working.
Three out of four young people under 35 surveyed by Ipsos for ČSOB Penzijní společnost feel worried that they will not be well off financially in retirement.
However, they start thinking about possible savings at the age of 30. Roughly half of them consider it appropriate to start saving between 20 and 30. A quarter even mentioned no later than the age of 18. However, one in ten would not be in a hurry yet; they think it is enough to save for retirement from the age of 40 at the earliest.
Even though young people under 35 are aware of possible financial difficulties in retirement and their opinion of saving is positive, only half of them save for this period.
Yet, the earlier you start saving, the better off you are. Not only will there be no need to save considerable sums that will put a significant strain on your budget, but thanks to a well-chosen product, it is possible to save an imposing amount for old age. According to financial experts, people should think about financially preparing for retirement when they start to be economically productive, preferably in their first job right after graduation.
“Young people have one big advantage, and that is a long investment horizon, which will work for them in terms of money appreciation,” added Václav Lokaj from ČSOB Penzijní společnost.
Pension savings and investments in real estate or cryptocurrencies
Most often, young people save for their old age in a current or savings account, which almost two-fifths of the respondents mentioned. Just under a third have pension savings, and about one in six have life insurance. Young people most frequently mentioned investments in real estate, cryptocurrencies, or commodities as another option for saving for retirement.
Young people also value the employer’s contribution to pension savings. Two-thirds of them see it as an attractive benefit. However, as the survey showed, only one in three receives it.
“Employers often contribute an average of CZK 1,000 per month, so considerable room for growth exists. It is the increased contributions from employers, together with a higher number of clients who would receive them, that could fundamentally help accelerate savings and the accumulation of funds for retirement,” Lokaj said.