The most successful people when it comes to retirement planning are the "preemptive planners," those that look to prevent future risks or at least their consequences. But a recent MetLife Mature Market Institute study finds many are not preparing for the unexpected events that could interfere with their plans.
The good news: it is not too late for most to make the needed changes.
When it comes to finance, there are 10 categories people, ranging from snoozers, who don't think about future risks at all, up to the preemptive planners.
“We found that actively preparing for the surprises that inevitably come our way is the most successful approach to retirement,” said Sandra Timmermann, director of the MetLife Mature Market Institute. “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."
Preemptive planners have multiple sources of retirement income and assets; the types of sources vary by such features as the presence or not of a defined-benefit plan; 401(k) plans; other investments; eligibility for Social Security; annuities; and health insurance.
On average, survey respondents spent 15 hours in the past six months gathering information or planning for retirement. However, one in five spent no time on planning. Saving stood out as the most common item among survey respondents as “the one thing” they would do differently; many would start saving earlier (29%), some would save or invest more (12%), and others would make better investments (4%).
The survey was done online and had 1,007 respondents between the ages of 50 and 70.
Only two in 10 survey respondents report that they are very confident that they will have enough money to live comfortably if they or their spouse/partners live to 85 years of age or longer, and 58% said they are only somewhat confident. The remaining 22% are not confident in their retirement security. More than two-thirds of those who did feel at least somewhat confident about a comfortable standard of living and a long life identified a guaranteed stream of income as a reason for their confidence, followed by 51% who identified sufficient savings as contributing to their confidence.
