Retirement News : Seniors : Regrets About Retirement Savings? You're Not Alone

Regrets About Retirement Savings? You're Not Alone

Date Added: 11-03-2005

Baby Boomers have different investment
needs depending on their "retirement savings profile," but share some common
regrets when it comes to money: they are uneasy about the extent to which they
have saved for retirement.  Despite this -- and the fact that most will carry
debt into retirement -- they have expectations of a comfortable lifestyle in
retirement.  These are some of the key findings from the OppenheimerFunds
Investing for Retirement Survey released today by OppenheimerFunds, Inc., a
leading asset manager.  The nationwide survey examined the financial behaviors
and attitudes of 1,000 retirees and pre-retirees, most of whom are baby
boomers.
    "Most of the Boomers we talked to have mixed emotions when it comes to
money, feeling both regret and contentment," said Jim Ruff, President of
OppenheimerFunds Distributor, Inc.  "Many feel they could have planned better
and saved more responsibly, but did not for various reasons."
    The survey findings revealed that both workers and retirees are
uncomfortable with how much they have accumulated during their pre-retirement
years.  Ninety-seven percent of workers surveyed say that they regret how they
and their spouse spent their money considering how much more savings they
could have accumulated; 98% of retirees regret how they spent their money
before retiring.  Still, both groups continue to overspend and many are not
concerned about rising costs for critical expenses such as healthcare.
    "According to our survey, self awareness, being realistic and proper
planning are some of the keys for Boomers to achieve a successful retirement,
" said Ruff.  "Boomers need to take a step back and evaluate how they've saved
so far, gain a true understanding of future expenses and either formulate a
plan or re-evaluate an existing one."
    The survey was conducted between September and October 2004 among
Americans ages 45 to 75 with household incomes of at least $75,000 or
household savings and investments of at least $300,000 (not including primary
residence).  It measured the views and attitudes of working boomers and
retirees regarding retirement, preparations for retirement and confidence in
retirement planning. Six hundred workers and 401 retirees were surveyed.  The
telephone interviewing was conducted by Matthew Greenwald & Associates, a
leading market research firm focused on retirement planning based in
Washington D.C.  The margin of error (at the 95% confidence level) for the
total number of respondents in this study (1,001) is a plus or minus 3.2
percentage points.

            Boomer Profiles: Four Retirement Savings Personalities

    To help boomers better plan for retirement, OppenheimerFunds, Inc. and
Matthew Greenwald & Associates identified four "retirement savings profiles"
based on levels of confidence and preparedness among non-retired boomers:
smooth sailors (21% of respondents); nervous nellies (27% of respondents);
hopeful idealists (29% of respondents) and pensive procrastinators (23% of
respondents).
    "It's time to stop thinking of baby boomers as a single group and start
addressing their specific financial needs," said John V. Murphy, Chairman,
President and CEO of OppenheimerFunds, Inc.  "Advisors can help boomers
identify which segment they fit into and work with them to develop goals and
plans to address their specific needs."

    Smooth Sailors (Prepared and Unconcerned)  21% of non-retirees  This group
is the most prepared of the four.  They are the most likely to have an exact
dollar amount in mind as their accumulation goal for retirement (50% do) or as
their retirement income goal (42% do).  They are more likely than the
unprepared groups to have a written financial plan.  Despite this, they will
carry some debt (i.e. car loan, credit card debt) into retirement.  This group
is less likely than Boomers in other groups to expect to have a mortgage in
retirement (15% expect to).

    Some other characteristics of Smooth Sailors:
    * They are most likely to say that, considering their age, they are very
      prepared for retirement (87%);
    * They have saved more than others -- 22% have at least $1 million;
    * They enjoy investing (43%) and consider themselves excellent or good
      investors (82%).

    "Like good sailors, this group seems prepared for nearly any situation,"
said Ruff.  "This group enjoys investing and considers themselves successful
at it, giving them confidence in their ability to cruise into a comfortable
retirement."

    Nervous Nellies (Prepared and Concerned) 27% of non-retirees  This group
of non-retirees has taken many steps to achieve a secure retirement and
believe they are prepared, but are worried that events beyond their control
might compromise their ability to attain financial security.  They are most
likely to have a written financial plan (75%) and half have done a great deal
of financial planning in the past year.

    Some other characteristics:
    * The majority (87%) are very or somewhat concerned about the possible
      effects of a market downturn and 80% are concerned about rising medical
      costs;
    * They are more likely than any other group other than the Smooth Sailors
      to have accumulated a high amount in savings and investments (12% have
      at least $1 million).

    One reason for this group's higher concern may be that they lack trust in
their own investing abilities.  They are the most likely to have a financial
advisor, perhaps as a result of their lack of confidence in investing.
    "While it is impossible to control things such as market downturns and
rising medical costs, people who worry a lot would benefit from incorporating
these "potential" events into their plans," said Ruff.  "Whether its saving
more, spending less or investing in specialized financial products that can
help address specific needs, its important for this group to take steps to
ease their concerns."

    Unrealistic Optimists (unprepared/unconcerned)  29% of non-retirees These
investors are not prepared yet are optimistic about their prospects for a
comfortable retirement.  Very few (15%) consider themselves very prepared for
retirement and 72% say that, considering their age, they are only somewhat
prepared for retirement.  Yet 99% say they are looking forward to a
comfortable retirement.

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