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Retirement plan workaround: Inherit enough to live on

Survey finds many Americans are counting on older generations' wealth

With millions of Americans woefully unprepared financially for retirement, many have come up with a workaround for not putting away a big enough nest egg.

They plan on inheriting enough to pay the bills when they stop working. (Tweet This.)

That was one of the findings of a survey by HSBC on the plans and retirement expectations of more than 16,000 people in 15 countries, including 1,000 Americans, working age households and retirees.

Among working age people, nearly half expect to receive a legacy that will support them later in life. Of those who've received or expect to receive an inheritance, some 3 in 10 believe it will fully or partly fund their retirement.

"It's a potentially catastrophic assumption," said Brian Schwartz, a wealth adviser with HSBC. "That older generation is not comfortable discussing what exactly they're leaving their children or whoever else they're leaving their assets to. There's usually an underwhelming experience from the inheriting generation of what they receive when that older generation passes on."

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Schwartz said even if the older generation has planned on leaving an inheritance—and discussed it with their heirs—that nest egg can be severely scrambled by end of life expenses like costly long-term health care.

Read MoreAmong oldest Americans, 1 in 5 dies broke

And older American households, in general, seem less inclined to leave an inheritance to the next generation—preferring to spend it on family while they're still around to see that spending at work. Parents who choose to spend down their savings can visit their kids' new starter house; grandparents can watch grandchildren graduate from the college they help pay for.

Nearly a quarter of working-age people said they'd rather spend all of their savings while they're around to enjoy it and let children create their own wealth, according to the HSBC survey. Fewer than 1 in 10 plan to save as much money as possible to pass on to the next generation.

Semi-retirement—working part time for awhile before quitting work altogether—is becoming more popular with Americans; some 42 percent of working-age Americans said they plan to semi-retire first, nearly double the 22 percent of current retirees who worked part time before fully retiring. Around the world, more than more than half of those who are working-age plan to semi-retire.

The biggest reason given for those choosing semi-retirement (41 percent) was to keep physically and mentally active. Others said they liked working and wanted the extra income to maintain a comfortable lifestyle. Some said they switched to working part time because they had to for financial or health reasons.

Retirement planning is not just about money; many people have a list of goals and aspirations they hope to accomplish when they wrap up their working years.

But those expectations are apparently not always any easier to achieve than financial security. Among those who had made it to retirement around the world, nearly three-quarters said they had not achieved some of those their hopes and aspirations.

Among the unfulfilled dreams, 1 in 5 cited extensive travel, with living abroad and learning a foreign language also high on the list. Roughly 1 in 10 retirees said they wished they had taken more frequent holidays, bought a new car, written a book, started a business, gotten more exercise or gone back to school.