Saving for Retirement Personal pension planning in China and Hungary

Absztrakt (kivonat)

Problem raised: How do people in Hungary different from those in China when doing their financial planning for retirement? Overview of literature: I used books - Fundamentals of Business, Skripak, S. J (2016); Personal Financial Planning, Gitman, L. J (2004); Master Personal Finance, Gorham, J (2008) – to extract the basic concepts and definition of what is personal finance and its insights in different life stage. And books – Macroeconomics, Cowell, Frank A (2004)- to understand the behaviors and performance of an economy as a whole, it focuses on the aggregate changes in the marketplace, such as unemployment, growth rate, gross domestic product, and inflation I used online public researches from companies (KPMG, PWC, McKinsey &Co.), universities (Corvinus University of Budapest), professional scholars, government reports, and press to understand the behavior and attitude of Hungarian and Chinese when making their retirement financial planning. I learned about how the pension system works in Hungary and China from a trustful and professional resource: Organization for Economic Co-operation and Development (OECD). All the statistics related information come from World Bank and Statista. Research conducted: A Face-to-face interview. Based on the results from academic research, I conducted a questionnaire-based interview on Hungarian and Chinese, with five shortlisted people in each group. They all have 10 to 25 years of working experience, the occupations ranging from full-time worker to self-employed person, and the primary information I extract from them are: Gender; year to start saving; saving proportion; number of apartment owned; pension fund/ health insurance type(public/private); Investment portfolio( Stock/bond); Retirement attitude; Whether working after retirement. Conclusion: If we are making a cross-country comparison analysis, many people may potentially have stereotypes about those countries' cultures and people and explain every difference by using "culture difference." For example: "European people only know how to enjoy life not thinking about their future will be" and "Asia people are hard-working and conservative about their life plan." So, to break this mindset, in my thesis, I talked about how saving plays a vital role in retirement preparation. Also, I collected some academic researches- Ranging from pension systems to big data analysis- to contrast the result with my practical interviews, as a find of this comparison, I realized some discrepancies between the theoretical and practical effects, so do the similarities. Moreover, the root causes are more career variance and individual lifestyle determined rather than a simple culture background difference. People who have a well-paid job usually are more positive towards their retirement life and more structured at their early life stage towards financial retirement preparation, for instance, purchasing houses and investing in short-term bonds or stocks. People who do not have a full-time job or an average-paid job are usually more pessimistic and uncertain about their retirement life and planning. After understanding what and why there are such differences and similarities, the second purpose of writing this thesis is to encourage young people to start saving as early as they can and to apply the financial mindset into their private life.