Challenged Yet Hopefuls lead active lives and are focused on continual self-improvement, the survey found, and they rate themselves as happy and positive. But they waited until around age 45 to start saving for retirement, and so their life in retirement is limited because of that lack of financial preparation. They also were more likely than not to have made early withdrawals from their retirement accounts.
“They may feel they’re doing OK in the present, but the future trajectory is not promising, and they may well have to find ways to continue earning money or to spend far less in order to survive in their later years,” the survey report said.
Regretful Strugglers struggle not just financially, but also in relation to the other three pillars of health, family and purpose. Only half said they spend quality time with family and friends.
“A majority of Regretful Strugglers say they cannot live comfortably on the resources they have accumulated. A third admit they’re in serious financial trouble, and 43% say they are financially worse off in retirement than they were during their working years—even with the support of Social Security and Medicare,” the survey stated.
While they started saving for retirement around 42, which is three years before those retirees in the Challenged Yet Hopeful group, and fewer made early withdrawals from their retirement accounts, other setbacks along the way—illness, caregiving, divorce or death of a spouse—seriously impacted their ability to ensure a comfortable retirement.
“These people are pessimistic, and they are not enjoying their retirement at all,” Dychtwald said. “They’re the least active in retirement, and they’re the most likely to feel anxious and isolated.”
Taking this new collection of data points, Age Wave also plotted the archetypes against the Four Pillars and found that Purposeful Pathfinders, not surprisingly, graded themselves the highest across the board in health (88%), family (97%), purpose (98%) and finances (96%). Also not surprisingly, Regretful Strugglers graded themselves the lowest in health (30%), family (59%), purpose (37%) and finances (21%).
In the middle were Relaxed Traditionalists and Challenged Yet Hopefuls, who graded themselves similarly in family and health. The Traditionalists scored much higher in finances (75%) than the Hopefuls (42%), but Hopefuls rated themselves higher in purpose (86%) than Traditionalists (71%).
Fifty-two percent of Pathfinders and Traditionalists said they currently work with a financial advisor, while just 6% of Hopefuls and 8% of Strugglers said they do.
“The two groups who are doing the best in their later years are the ones who had a financial advisor on their team for years, and in most cases decades,” Dychtwald queried.
Overall, 61% of retirees said they wish they had planned better for the financial aspects of their lives in retirement, he said. “An almost equal number, 54%, said they might have planned financially, but they should have planned for how to spend their time, where they wanted to live, and how they would make new friends,” Dychtwald said.
“You may not think your job as a financial professional is about asking people questions about the non-financial aspects of their lives, but they don’t have anyone else to talk to about this,” he said. “There are no experts who have risen up.”
Dychtwald likened a financial planner to a whitewater rafting guide on an rapids excursion, one who knows the terrain ahead but lets the client choose whether to go around a rapid or through it. “They’re essential to giving us a heads up to what’s coming, giving us choices for how we’re going to navigate through it, and then making sure when we don’t go over a cliff,” he said.
In addition to the four personality archetypes, the study revealed that, with longevity expectations pressuring advisors to use 95 as a rough guide for age of death, there are four phases of retirement: Anticipation, where the planning takes place; Liberation/Disorientation, which is the first couple of years when everything is new; Reinvention, a phase that’s the heart of retirement and can last from year three to 14 or so, and Reflection/Resolution, which lasts from year 15 onward.