Tough economic times have had a substantial emotional impact on
those approaching and beginning retirement
MINNEAPOLIS--(BUSINESS WIRE)--
Americans’ attitudes, ambitions and preparation for retirement have
changed dramatically as a result of the recession. Five years after
introducing the stages of retirement, Ameriprise Financial (NYSE: AMP)
revisited its groundbreaking New Retirement Mindscape®
study to see how consumers’ journey to and through retirement has
changed. The findings underscore the substantial emotional impact the
difficult economic environment has had on people, especially those who
are approaching retirement or who have retired within the past year. In
fact, the economy’s impact has been so severe that a new stage has
emerged and another has been renamed.
In 2005, when interviews for the first New Retirement Mindscape®
were conducted, the U.S. economy was riding a prosperous high,
a peak between the recession of 2001 and the downturn that began in
December 2007. “Five years later our society is in a very different
place, and as a result, consumers are approaching retirement with a
different mindset,” said Craig Brimhall, vice president of retirement
wealth strategies at Ameriprise Financial. “The years leading up to
retirement used to be filled with a sense of excited anticipation, but
now we are seeing people hesitate and really question if they are making
the right decision. And in the first year of retirement, a stage once
synonymous with feelings of liberation, consumers are facing new doubts,
concerns and the reality that retirement may not be what they expected.”
The New Retirement Mindscape IISM study,
conducted by telephone by Harris Interactive, uncovered six distinct
attitudinal and behavioral stages that occur before and during
retirement: 1) Imagination, 2) Hesitation, 3) Anticipation, 4)
Realization, 5) Reorientation and 6) Reconciliation. This compares to
five stages that were identified in the previous study: 1) Imagination,
2) Anticipation, 3) Liberation, 4) Realization and 5) Reorientation.
Stage 1: Imagination (six to 15 years prior to retirement) –
People in this earliest stage preceding retirement are feeling
substantially less “hopeful” (71% vs. 81%) and “optimistic” (72% vs.
77%) than they were in 2005. However, they remain generally positive –
84% feel “happy” and 70% feel “enthusiastic” about retirement – likely
because they still have time to prepare and recover financial losses
they experienced during the recession.
Stage 2: Hesitation (three to five years prior to retirement) –
While people in this stage were previously grouped with those in the
Anticipation stage, the 2010 survey showed that significant differences
have emerged three to five years prior to retirement. In contrast to
people within two years of retirement – whose responses have remained
relatively unchanged – significantly fewer in the Hesitation stage
expect to feel “happy” in retirement than did so in 2005 (82% vs. 92%).
Job setbacks and conflicting financial priorities may be among the
reasons this group is also less likely to have set aside money in
employer-sponsored plans or their own savings/investments than in 2005
(74% vs. 91%). They are also far less likely than those in the new
Anticipation stage to expect to greatly enjoy retirement (64% vs. 75%)
or to be setting aside money in their own savings/investments (67% vs.
83%).
Stage 3: Anticipation (two years prior to retirement) – After
questioning their readiness, excitement begins to build in the final two
years leading up to retirement day. People in the Anticipation stage are
the most likely to feel “on track” for retirement (77%), possibly
because they are also the most likely to be setting aside money in their
own savings/investments (83%) and working with a financial advisor (54%).
Stage 4: Realization (retirement day to one year following) –
While the first year of retirement was previously called “Liberation,”
the optimism and excitement that once accompanied this stage have been
muted by the recession. With sharp declines in the value of portfolios,
as well as “forced retirements” due to layoffs and career setbacks, it
isn’t surprising that people are struggling with the realities of
retirement. The decrease in positive feeling is dramatic – compared to
2005, far fewer are enjoying retirement “a great deal” (56% vs. 78%),
say they are living their dream in retirement (45% vs. 68%) or feeling
that retirement has worked out as they planned (57% vs. 77%).
Stage 5: Reorientation (two to 15 years after retirement) – After
a difficult year of adjustment, most people enter the Reorientation
stage feeling more “happy” (80%) and “on track” for retirement (69%)
than they did in previous stages. They continue to enjoy having “control
over their time,” and to an even greater extent than in 2005. They are
also better prepared than they were five years ago – more report that
they set aside money for retirement (83% vs. 72%) and are working with a
financial advisor (43% vs. 34%).
Stage 6: Reconciliation (16 or more years after retirement) –
While the vast majority of people in the Reconciliation stage continue
to feel “happy” (80%), they are experiencing depression at a
significantly higher rate than in 2005 (20% vs. 5%). Troubled by the
loss of income and social connections, they are among the least likely
to say they are enjoying retirement “a great deal” (56%) – and less so
than in 2005 (75%).
“Coming out of the recession, it may not be surprising that people –
especially those who are closest to their retirement day – are looking
at this important milestone differently,” added Brimhall. “However, I’m
encouraged to see consumers in some stages take a more proactive
approach to planning and saving. I believe that the more people
understand the stages of retirement and prepare themselves – emotionally
and financially – the more likely it is they’ll have the confident and
fulfilling retirement they desire.”
About the study
The New Retirement Mindscape IISM
and New Retirement Mindscape® studies were
commissioned by Ameriprise Financial, Inc. and conducted by telephone by
Harris Interactive in May 2010 and August 2005 among 2,007 (2010) and
2,000 (2005) U.S. adults age 40-75. The sampling error for the 2010
study is +/-2.5%. The 2005 study was conducted in conjunction with Age
Wave and Ken Dychtwald, Ph.D.
About Harris Interactive
Harris Interactive is one of the
world’s leading custom market research firms, leveraging research,
technology and business acumen to transform relevant insight into
actionable foresight. Known widely for the Harris Poll and for
pioneering innovative research methodologies, Harris offers expertise in
a wide range of industries. For more information, visit harrisinteractive.com.
About Ameriprise Financial
Ameriprise Financial, Inc. is a
diversified financial services company serving the comprehensive
financial planning needs of the mass affluent and affluent. For more
information, visit ameriprise.com.
Brokerage, investment and financial advisory services are made available
through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some
products and services may not be available in all jurisdictions or to
all clients.
© 2010 Ameriprise Financial, Inc. All rights reserved.
Source: Ameriprise Financial, Inc.
Contact:
Ameriprise Financial, Inc.
Stacy Housman
612-678-7215
stacy.m.housman@ampf.com
or
RF|Binder
Pat
Tucker
212-994-7561
patrick.tucker@rfbinder.com