Sun Life Creates Unretirement Index: Measures Attitudes and Expectations towards Iissues Influencing Retirement

Sun Life Financial, Inc., had released its Unretirement Index to track the changing attitudes and expectations American workers have regarding retirement. It plans to release the Index multiple times each year and use it to gauge how economic, financial and societal forces are affecting working Americans, and forecast their future retirement decisions.

According to its initial release, 48% of the U.S. workforce believes it will still be working at the traditional retirement age of 67, and four of the five top reasons given were not financial in nature. Thus, for example, the most cited reason for continuing to work (83%) was "to stay mentally engaged."

"As our workforce evolves and attitudes are impacted by economic conditions and world events, the nature of retirement in America evolves as well," said Bob Salipante, President, Sun Life Financial U.S. "Traditional views on retirement are quickly evolving and more Americans are choosing to be unretired. This Index for the first time shows how changes in the economy, politics, healthcare and lifestyle are all critical factors in more and more Americans choosing to continue working during traditional retirement years."

Source: Sun Life Financial News Release (October 1, 2008)

Canada: Study Evaluates Worker Understanding of Anticipated Retirement Income

According to research published by Statistics Canada, about two-thirds of Canadian "near-retirees" anticipate that their retirement income will be adequate or more than adequate to maintain their standard of living once they have left the workforce. In addition, individuals who receive advice are more likely than others to express confidence in the adequacy of their retirement savings to maintain their standard of living in retirement.

Of the 7.2 million Canadians aged 45 to 59 in 2007, about 80% or 5.7 million were actively or recently employed and had not previously retired. Of these 5.7 million near-retirees, 71% received financial advice from at least one source, and 50% received advice from at least one source in the financial industry. However, 29% do not receive any advice.

These results come from two articles by Grant Schellenberg and Yuri Ostrovsky drawing on the results of the 2007 General Social Survey (GSS) on family, social support and retirement: "The retirement plans and expectations of older worker", which examines when individuals plan to retire, the certainty they have in their plans, and their confidence in their financial preparations, and "The retirement puzzle: Sorting the pieces", which examines the retirement advice and information they receive.

Source: Statistics Canada The Daily (September 9, 2008)

Survey: MetLife Reports that Pre-Retirees Overestimate Retirement Moneys and Underestimate Retirement Length and Needs

According to research conducted by MetLife, 69% of pre-retirees overestimate how much they can draw down from their savings, with 43% saying they believe they can withdraw 10% or more each year while still preserving their principal, even though most retirement experts suggest a withdrawal rate of no more than 4% annually. In addition, 60% underestimate life expectancy and 49% underestimate the amount of pre-retirement
income they’ll need once they retire.

These results are reported in MetLife's 2008 Retirement Income IQ Test, released five years after its MetLife’s first Retirement Income IQ Test. Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute said that “While we would have liked to have seen more dramatic increases in the scores, directionally
Americans are improving their retirement income IQs."

"Yet, there are still far too many misconceptions about retirement income issues," added Timmermann. "Most concerning is the fact that so many pre-retirees overestimate how much they can spend down from their retirement savings annually. This statistic should serve as a wake-up call for pre-retirees and advisors alike."

Source: Press Release (June 25, 2008)

Survey: Older Workers Growing More Comfortable with Change

Most working Americans aged 50 and older (65%) are becoming more comfortable with change and uncertainty as they grow older according to a survey released by SecurePath by Transamerica. Furthermore, the survey reports that 50% of these workers say they are at their best during times of change and 50% say that change is exciting. Based on employee attitudes, the survey differentiating pre-retirees and identifies four key segments based on their “change profiles”:

• Venturers: employees exhilarated by change--they have a high level of confidence about investing and retirement.
• Adapters: employees who tend to shy away from change finding it stressful but also exciting--many feel they will be in control of their retirement, are confident they will handle the transition well, and believe everything will work out.
• Anchoreds: employees who look for consistency in their lives rather than seek change--their apprehension towards change negatively affects their confidence in their retirement savings and their investing and may lead them to be less prepared for retirement.
• Pursuers: employees who prefer change and find it exciting, but don’t always feel they handle it well--as a group, they are the most likely to say they will continue working instead of retiring. Their desire for change coupled with their lack of confidence leaves them open to retirement planning ideas but also with a need for reassurance in order to execute.

Among other fndings, the study suggests they are not only comfortable with the uncertainty; they also may be more realistic than commonly thought about their next life stage. In this regard, it finds that 68% plan to be working in some capacity as they age.

Source: SecurePath by Transamerica Press Release (March 12, 2008)

The Retirement Decisions of Two-Career Couples

Marilyn Gardner, a staff writer for The Christian Science Monitor presented a new angle on employee retirement decisions: what should dual career couples do? Overall, from a financial viewpoint, she writes that experts suggest that a staggered retirement works best. This works from the financial perspective, where leaving the workforce at different times may give one spouse time to earn more and serves as a hedge against uncertain financial markets or provide health insurance for a retired partner who is not yet 65 and thus eligible for Medicare. However, finances are not the whole story:

Couples stagger retirements for other reasons as well. "Typically the wife is a little younger and took time out for raising children," says Ronald Manheimer, executive director of the North Carolina Center for Creative Retirement in Asheville. "She came back into the workforce and is short of achieving full pension capability or is enjoying her level of accomplishment. She's not willing to give it up yet."

Source: Christian Science Monitor "Dual-career couples: Who retires when?" (September 9, 2007)