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FAs Key to Retiree Satisfaction

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The market decline that began in September 2008 had a clear impact on those responding to a recent MFS survey about their financial future, regrets about risky investments and priorities in selecting future investments.

The MFS Investment Management’s Retirement Research on Affluent Retirees sampled retirees aged 55 to 75, who use a financial advisor, who retired in 2003 or earlier, and who had $500,000 or more in household investable assets, including retirement funds. The initial survey was conducted in August and a second round of surveying took place in October.

Among the most pronounced changes found in the October survey was the percentage of respondents who said they were either extremely or very concerned about a major decline in the stock market. This figure grew to 65 percent in October, from 42 percent in August.

Those who were similarly concerned about investing too aggressively more than doubled, to 23 percent from 11 percent earlier. Concerns about outliving retirement savings rose to 25 percent from 13 percent.

Respondents also changed their priorities between August and October when asked what they would have done differently before or since retiring. In the October sample, significantly more respondents than in August said they would have:

-Taken fewer risks with investments (17 percent vs. 9 percent earlier).

-Spent less in retirement (11 percent vs. 6 percent).

-Invested in principal protection or income-guarantee products, like annuities (12 percent vs. 9 percent).

In October, respondents ranked a guaranteed-payment stream as the single most important factor when choosing an investment (35 percent, up from 23 percent in August). By contrast, 24 percent in August picked the ability to make decisions about how money is invested, diversified, and allocated as the most important factor; in October that response fell to 19 percent.

Among respondents who said that they were either “extremely satisfied” or “very satisfied” with their retirements, the most frequently cited characteristics were:

-Retired when or later than they had planned (89 percent),

-$1 million or more in household investable assets (88 percent),

-Had a detailed saving plan (88 percent),

-Have a detailed retirement income plan (88 percent),

-Retired voluntarily (86 percent),

-Have a pension (85 percent), and

-Don’t support parents or children (84 percent).

“Everyone struggles with the issue of being prepared for a secure retirement. But these findings show once again that investors who take the time with their financial advisors to work out a detailed plan for their income in retirement are far more likely to be satisfied with the outcome,” says William Finnegan, senior vice president and director of global retail marketing for MFS Fund Distributors.

More details on the research is available at:


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