The recession has left few areas of American life untouched. Now, a survey released on Monday, September 13, by Ameriprise Financial indicates that Americans’ attitudes, ambitions and preparation for retirement have changed dramatically because of the recession.
“New Retirement Mindscape II” is an updated version of Ameriprise Financial’s five-year-old original study. The findings underscore the economic environment’s substantial emotional effect on people, especially those who are approaching retirement or who have retired within the past year, the firm said in a statement. “In fact, the economy’s impact has been so severe that a new stage has emerged and another has been renamed.”
In 2005, when interviews for the first “New Retirement Mindscape” were conducted, the U.S. economy was riding a prosperous high. “The years leading up to retirement used to be filled with a sense of excited anticipation, but now we are seeing people hesitate and really question if they are making the right decision,” Craig Brimhall, vice president of retirement wealth strategies at Ameriprise Financial said in the statement. “And in the first year of retirement, a stage once synonymous with feelings of liberation, consumers are facing new doubts, concerns and the reality that retirement may not be what they expected.”
Both the new study and the original one were conducted by telephone by Harris Interactive–in May 2010 and August 2005–among some 2,000 U.S. adults aged between 40 and 75. The new study uncovered six distinct attitudinal and behavioral stages that occur before and during retirement:
Stage 1: Imagination (six to 15 years before retirement)–People in this earliest stage preceding retirement are feeling substantially less “hopeful” (71% vs. 81% five years ago) and “optimistic” (72% vs. 77%) than they were in 2005. However, they remain generally positive–84% feel “happy” and 70% feel “enthusiastic” about retirement–likely because they still have time to prepare and recover financial losses they experienced during the recession.
Stage 2: Hesitation (three to five years prior to retirement)–While people in this stage were previously grouped with those in the Anticipation stage, the 2010 survey showed that significant differences have emerged three to five years prior to retirement. In contrast to people within two years of retirement–whose responses have remained relatively unchanged–significantly fewer in the Hesitation stage expect to feel “happy” in retirement than did so in 2005 (82% vs. 92%). Job setbacks and conflicting financial priorities may be among the reasons this group is also less likely to have set aside money in employer-sponsored plans or their own savings/investments than in 2005 (74% vs. 91%). They are also far less likely than those in the new Anticipation stage to expect to greatly enjoy retirement (64% vs. 75%) or to be setting aside money in their own savings/investments (67% vs. 83%).