Overwhelming majority of those surveyed say they were “in control”
of their decision to retire
MINNEAPOLIS--(BUSINESS WIRE)--
A new study released today by Ameriprise Financial (NYSE: AMP), finds
that more than three-quarters (76%) of baby boomers who retired within
the past five years felt “in control” of their decision to retire.
According to more than half of recent retirees, physical health (53%)
and emotional preparedness (52%) are the main contributors towards this
sense of control boomers are feeling.
The Retirement Triggersstudy, which surveyed 1,000
newly retired baby boomers ages 60-73 with at least $100,000 in
investable assets, explores the driving factors behind why people
decided to retire when they did. The most-cited responses include, “I
decided it was time to enjoy life” or “I no longer wanted to work”
(51%), “I reached my retirement savings goal/my advisor helped me
understand I could retire” (17%), and “I was forced to retire by my
employer/was offered early retirement incentives or lost my full-time
job” (16%).
“This study finds that choosing a retirement date can be as much an
emotional decision as a financial one,” said Marcy Keckler, vice
president of financial advice strategy at Ameriprise Financial. “With Retirement
Triggers, we’re finally seeing how the first wave of baby boomers
approached this critical decision and how they’re feeling about it
today.”
Most Boomers Feel Confident After Retiring, But Not Without Some
Doubts
The first five years of retirement appear to be a
honeymoon period for retirees. A large majority (75%) of retirees say
they are “very satisfied” with their lifestyle in retirement and just as
many say they are spending their new free time doing what they planned
to do in retirement. Nearly one in three (31%) say there was nothing
difficult about transitioning into retirement, but the rest did endure
some bumps. The hardest aspects of retirement cited by respondents are
emotional adjustments like losing connections with colleagues (37%),
getting used to a different routine (32%) or finding purposeful ways to
pass the time (22%). Despite these challenges, 65 percent say they fell
into their new routine fairly quickly and half (52%) say they have less
free time than they thought they would before retiring. The positive
sentiments continue with the fact that nearly half (43%) say they are
having more fun than they expected.
It’s not just a sense of optimism that is driving respondents’
confidence; these new retirees are also feeling financially secure. More
than half (57%) of study respondents say they are very satisfied with
their financial situation in retirement, and another 37% are somewhat
satisfied. This may help explain the fact that only one in ten (11%) of
these new retirees have returned to work (in any capacity) during
retirement. Yet, most of those who are working for pay say they didn’t
do it for the income, but because “it seemed like an interesting
opportunity” or because they “wanted some intellectual stimulation.”
Overall, very few new retirees who felt in control leading up to their
retirement day have second-guessed themselves; 98% say they are
satisfied with the decision to retire when they did. However, if they
could do it over again, one in three (31%) of all respondents say they
would adjust the timing of their retirement (14% say earlier and 17% say
later) and nearly as many say they would save more money prior to
retiring (29%).
Looking Back: Preparing to Pull the Retirement Trigger
Given
their high level of confidence and satisfaction in retirement, it comes
as a bit of a surprise that some study respondents weren’t always so
sure about their retirement readiness leading up to the big decision.
Nearly half (47%) say they did feel ready, but they had mixed emotions
about retiring. Another quarter (25%) say that their mindset one year
before retirement was that they “couldn’t wait,” and 21% admit they felt
uncertain or not ready.
Stress appears to be a natural emotion leading up to retirement, even
for those who are overwhelmingly happy now that they’ve left the
workforce. Nearly two-thirds (63%) of newly retired boomers say they
felt stressed about retirement leading up to the decision, but only 25%
say they still feel stress now that they’ve been retired for some time.
Younger boomers who are preparing for retirement should take note of
what made their predecessors feel most confident leading up to
retirement – as well as some of the things that they wish they would
have considered more carefully before pulling the retirement trigger.
The majority of respondents say that while preparing for retirement,
they felt completely confident about things like affording basic needs
in retirement (75%), their ability to pursue hobbies (62%) and keeping
their minds active (60%), all of which helped them make the decision to
retire. However, fewer felt confident about developing social
connections in retirement (45%) and preparing their estate plans (35%).
Financial Preparation Still Imperative for Retirement Confidence
So
how does age – specifically when Americans can receive Social Security
or Medicare benefits – play into the retirement decision? Surprisingly,
fewer than one-third (29%) of new retirees say that eligibility for
Social Security and Medicare was a driving factor in their decision to
retire; the fact that 70% of respondents are drawing a portion of their
retirement income from a pension may help explain why.
This is not to say that the first wave of retiring baby boomers weren’t
focused on their finances: 94% say it was extremely or somewhat
important that they felt financially confident about retirement before
pulling the trigger. But some are still working out a few tweaks – 22%
of respondents say they are spending more money than they thought they
would in retirement and nearly as many (24%) believe they underestimated
their retirement income needs. On the flip side, 28% of new retirees
shared that they weren’t spending as much as they had planned (thus far).
“Oftentimes, the importance of preparing emotionally for retirement can
get buried in all of the financial decisions that must be made important
leading up to this milestone,” said Keckler. “In reality, emotional and
financial preparation goes hand-in-hand. A financial advisor with a
comprehensive approach can be a great resource for people of all ages to
help ensure they’re considering all dimensions of retirement before
pulling the trigger.”
For more information about the Retirement Triggers study, see our
research page at ameriprise.com/retirementtriggers.
About the survey
The Retirement Triggers study was
created by Ameriprise Financial utilizing survey responses from 1,000
Americans ages 60 to 73 who have retired in the last 5 years from their
primary profession and who have at least $100,000 in investable assets.
The online survey was commissioned by Ameriprise Financial, Inc., and
conducted by Artemis Strategy Group from October 20 – November 4, 2014.
About Artemis Strategy Group
Artemis Strategy Group (www.Artemissg.com)
is a communications strategy research firm specializing in brand
positioning, thought leadership and policy issues.
About Ameriprise Financial
At Ameriprise Financial, we have
been helping people feel confident about their financial future for 120
years. With extensive asset management, advisory and insurance
capabilities and a nationwide network of approximately 10,000 financial
advisors, we have the strength and expertise to serve the full range of
individual and institutional investors' financial needs. For more
information, or to find an Ameriprise financial advisor, visit
ameriprise.com.
For further information and detail about the Retirement Triggersstudy including verification of data that may not be published as
part of this report, please contact Ameriprise Financial.
Investment advisory products and services are made available through
Ameriprise Financial Services, Inc., a registered investment adviser.
Ameriprise Financial Services, Inc. Member FINRA and SIPC.
© 2015 Ameriprise Financial, Inc. All rights reserved.
Ameriprise Financial
Chris Reese, 612-678-5410
Media Relations
Chris.L.Reese@ampf.com
Source: Ameriprise Financial, Inc.