A MetLife Mature Market Institute (MMI) study finds that while Americans think they may be planning for retirement, many may not be preparing for unexpected events that could interfere with their plans.
The study, “Best-Case Strategies for a Flexible Retirement: The MetLife Study of Thinking About Retirement in Uncertain Times,” outlines 10 different types of planners, pointing to the best retirement planners and those who may face the most danger in retirement planning.
From the “Active Resisters” who “choose to snooze,” or choose to ignore information about future risks, to “Wood Knockers” who think about the unexpected but rely on hope, those in the best positions are the ones who are prepared for the unexpected: job loss, health issues, long-term care costs, stock market swings, and others.
“We found that actively preparing for the surprises that inevitably come our way is the most successful approach to retirement,” said Sandra Timmermann, Ed.D., director of the MetLife MMI. “Knowing you will have guaranteed income sources available and access to emergency funds is key. To maximize income in retirement while maintaining liquidity, consider options beyond low-yielding savings accounts. Some annuity and home equity products enable you to have access to cash while optimizing returns at the same time. Ultimately, the capacity to withstand the unexpected is dependent on the ability of people to imagine, anticipate and prepare for the circumstances that are often beyond their control.”
The best people in terms of retirement preparedness are the “Preemptive Planners,” or those who have a sense of self-reliance and think about the future, anticipate the unexpected, live by personal finance rules, gather information and take action.
Of the 1,007 survey respondents, ages 50-70, the average time spend on planning for retirement was 15 hours over the past six months. Twenty percent spent no time on planning. Only 20% are very confident they will have enough money to live comfortably if they live to 85 years of age; 58% are somewhat confident.
For a full report on the MMI survey, click here.
Written by Elizabeth Ecker