But there is good news - learning about healthy financial habits and practising your financial skills (like you're doing now!) can increase your financial confidence and have a positive effect on your financial wellbeing.
In China, HSBC's research shows that 66% of working people have either not yet started saving for retirement, have stopped doing so, or find it difficult to manage their retirement fund.
It is hard to estimate how much money you might need for your retirement. A good way to begin planning for life after work is to assume you'll need between half and two-thirds of your salary, after tax is deducted, to maintain your current lifestyle.
You can estimate your retirement needs very roughly using a few simple steps. Let's suppose you currently earn INCOME (approximately INCOME after tax). You plan to retire aged 65. You are fit and healthy. Several members of your family lived into their nineties, so you might need an income for as many as thirty years. Your retirement goal is:
[Current salary after tax * 0.66 * Number of years = Savings goal]
And since government sponsored pension plans are unlikely to cover what you need in your retirement, the earlier you start saving, the larger your retirement nest-egg will be. That's because the longer you save, the more the interest you earn compounds. This power of compounding happens when you earn interest not only on your savings, but also on the accumulated interest you've already earned.