METLIFE RETIREMENT READINESS INDEX STUDY INDICATES PRE-RETIREES AND RETIREES LAG ON PLANNING: A SMOOTH TRANSITION, SUCCESSFUL RETIREMENT AT STAKE

METLIFE RETIREMENT READINESS INDEX STUDY INDICATES PRE-RETIREES AND RETIREES LAG ON PLANNING: A SMOOTH TRANSITION, SUCCESSFUL RETIREMENT AT STAKE

Westport, CT, May 19, 2010

The newly released "MetLife Retirement Readiness Index: Are Americans Prepared for the Transition?" indicates that pre-retirees can learn valuable lessons from retirees on making retirement decisions and completing a series of 15 specific career tasks to help smooth the transition to retirement. The study is accompanied by a "Retirement Readiness Workbook" that is available free to the public to help them assess their own preparation.

The study respondents were asked to determine their progress on issues like: 1) when they'll retire and, upon retirement, whether or not they’ll transition to part-time work and what they'll do, 2) how they’ll balance leisure and work in retirement, 3) how retirement will affect their relationships, 4) how much money/income they'll need and how much they’ll have, and 5) how much contingency planning they’ve done.

The study revealed that those with fewer than five years until retirement have higher scores than those further from retirement and that men have completed more retirement planning activities than women. Those who have already retired scored much higher than pre-retirees in all categories.

"While many seek the help of experts, retirement planning is often a do-it-yourself endeavor and many pre-retirees admit they have quite a way to go", said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. "Deciding to retire without having substantially completed specific tasks can put a successful transition and satisfying retirement at risk. This type of planning can be complex and lengthy, so it’s important that people start preparing as early as possible, even as early as their 20’s, to ensure a more fulfilling and enjoyable retirement.

"Only a third of people who say they would like to do some type of work when they retire have explored alternate careers, and still fewer, 10%, have focused on their employment prospects. A third have not created a contingency plan in case of a financial setback. The financial risks surrounding retirement have increased dramatically because of longevity, low interest rates, the volatile stock market, business performance and employment conditions, among other issues, and everyone should further consider the fact that illness and other unanticipated issues can have an impact on any plans", said Dr. Timmermann.

Key findings of the study include:

• Most people wait until the final few years prior to retirement to make significant decisions. Older workers, age 60–64, those within five years of retirement, and retirees have put significant effort into determining what’s necessary to receive corporate and government retirement benefits.
• 46% of respondents who are still working will delay their planned retirement age. However, of those who have already retired, 64% report they retired earlier than expected, while only 33% retired when planned. Only 3% report they retired later than expected.
• Males are much more likely than females to have thought about whether full-time retirement is financially feasible and how much they are willing to work in retirement. They are also more likely than females to have determined whether their retirement plans are adequate, identified what external factors could affect their retirement, and determined the steps necessary to receive the benefits due them.
• 52% of respondents are behind in their savings goals; 25% say they are significantly behind. Only 28% are confident they are on track or have reached their goals.
• Only a third (35%) of the 45- to 49-year-olds feel prepared for retirement, while 64% of the 60- to 64-year-olds and 81% of 65- to 70-year-olds feel prepared.
• 46% of respondents have considered the importance of relationships with co-workers in making the decision to retire and 45% have considered how various aspects of their retirement might positively or negatively affect their relationships with family and friends.

The MetLife Mature Market Institute notes that completion of the retirement tasks does not imply that one should retire or not, but that completion does serve as a benchmark to help pre-retirees prepare for the transition to retirement, using a holistic approach.