Summary of Findings - Personality Types and Retirement

Personality Types and Retirement

An analysis of the workers and retirees in the 1998 RCS reveals that personality, attitudes toward retirement, and financial attitudes reveal six distinct groups of Americans, who feel very differently about their retirement. According to responses to twelve questions about financial behavior, saving for retirement and planning for the future, respondents are categorized into one of six personality types: Deniers, Strugglers, Impulsives, Cautious Savers, Planners, or Retiring Savers.

Deniers (10% of Americans)

Nearly all Deniers say they believe that it is pointless to plan for retirement because it is too far away to know what they will need (95% say this describes them very well or well); only 19% of all Americans believe that statement describes them. A majority of these individuals says they are not willing to take any financial risks, no matter what the possible gains (56%). Another key descriptor of Deniers is that many indicate that preparing for retirement takes too much time and effort (40%).

Deniers’ actions, or lack thereof, are true to their words. Three out of five report they have not personally saved any money for retirement (59%), just 39% have retirement money saved. A majority indicates they will rely on Social Security as a major source of retirement income (58%). When compared to with the other groups, they are the least likely to indicate they are expecting any retirement income from personal savings or pensions. Deniers who have not saved for retirement give many reasons: they just do not think about retirement, they do not expect to retire, they believe that retirement will just work itself out, think there is plenty of time to save, or expect that Social Security will take care of them.

Confidence among Deniers is reflective of their lack of preparation – —they have the lowest levels of confidence that they will have enough money to live comfortably in retirement (56% not confident v. 36% among all Americans). When considering specific aspects of retirement, they also exhibit low confidence in their financial preparations for retirement. They are also concerned they will not have enough money to last, no matter how long they live; to pay for long-term care if necessary; or to pursue the leisure activities they desire.

The experiences of Deniers who have already retired confirm that retirement many not be "golden years" for this group. Retired Deniers are more likely than other retirees to report they are having a worse time in retirement than they expected. Many Deniers report retiring earlier than they planned to – —which is significant since many believe there is time to save or that they will not retire.

Deniers tend to be older Americans –— just one in three is younger than age 45. About One-half are married, ; just one in three is financially responsible for children. Four out of ten Deniers are already retired (42%), one-quarter are working full-time (28%). This group has the lowest levels of educational achievement and household incomes. Six out of ten have no education beyond high school (61%); seven out of ten report less than $50,000 in household income, including nearly one-half who have less than $25,000 in income (45%).

Strugglers (9%)

Strugglers are plagued by financial set-backs. Three of four say that just when they think they have a handle on their finances, something always happens that sets them back (74% v. 51% of all Americans). Strugglers are also more likely than others to believe that if they just save some money each month, they will be fine in retirement. Like the Deniers, a higher-than-average proportion believes that retirement planning takes too much time and effort.

A vast majority of Strugglers say that Americans do not save enough for their retirement (88%). They are, no doubt, thinking of themselves when they say that. Six of ten are not saving for retirement (59%). Most of those not saving claim they do not do so because they have too many current financial responsibilities or they do not anticipate retiring.

Among those that who are saving for retirement, most report they have accumulated less than $75,000 to carry them through their retirement years. Strugglers report being motivated into saving for retirement by family and friends or by the availability of a savings plan at work. Many Strugglers who are saving say they do not enjoy making investment decisions, and their lack of strong confidence in making wise investment decisions reflects this – —one-half are just somewhat confident they are investing wisely for retirement.

About one-half of Strugglers are expecting to rely on Social Security as a major source of retirement income. An unusually high proportion is expecting that an inheritance will provide retirement funds (11%). Significant proportions indicate they do not intend to retire and that employment will be a source for income during their golden years.

Confidence in retirement income prospects is weak among Strugglers; one-half are not confident they will have enough money to live comfortably throughout their retirement (52%). Between one-half and two-thirds are not confident about specific aspects of retirement, with most indicating they are not too confident about specific aspects of retirement. Strugglers are not at all confident they will have enough money for medical expenses, long-term care, and leisure activities.

Strugglers are middle age, middle-income families raising children. Most are between the ages of 35 and 54, married, and have at least one child they are currently financially responsible for. Most have graduated from high school (88%), but only (only? Isn’t this larger than the general pop?) and one-quarter have completed college (26%). A large proportion (39%) report household incomes between $25,000 and $50,000 a year. Only one-half of the Strugglers are working full-time (48%); %), while 17% are already retired.

Impulsives (20%)

This group believes that a comfortable retirement is achievable with a little planning and saving (91%); but they cannot seem to get there themselves. They suffer from financial set-backs (78%) and impulse purchasing (39%).

On average, Impulsives indicate they intend to retired early, at age 62. However, only about one-half have started saving for retirement (51%). Even among those who are saving, many say they have accumulated less than $10,000 for retirement. Those who are saving have been motivated by family and friends, the media, or by the realization that time to prepare is running out. to prepare. Those who are not saving are most likely to say it is because they have too many financial responsibilities.

Despite the fact that only one-half of Impulsives are saving, many know that they will have to provide their retirement income. For retirement income, Impulsives are counting on work-based retirement plans, either pensions or 401(k)s. One in five expects that employment will be a major source of retirement income.

Their confidence is in retirement is marginal. Half One-half report they are somewhat confident they will have enough money to live comfortably throughout retirement. While most are confident they will have enough money for their basic expenses during retirement, most Impulsives are either somewhat or not too confident about other specific aspects of retirement. This group is not confident that they will be able to afford long-term care, should they need it.

Impulsives may have some time to change their savings behavior and increase their confidence – —three out of five are younger than age 45. Most are married, but there is also a significant proportion of divorced or separated Impulsives. Three out of five Impulsives are raising children, with many responsible for two or three children. Most are working, in fact, two-thirds are in dual-income households. While few Impulsives are college graduates, most have some education past high school or a high school diploma. This group is middle income, with most reporting earnings between $25,000 and $75,000.

Cautious Savers (21%)

This group has a more calculating approach to retirement than Impulsives, but they are not as meticulous about retirement savings as Planners. Cautious Savers are conservative with their finances; nine out of ten say they are more like a savers than an investors. Nearly as many say they always research and plan for a big purchase (84%).

A majority of Cautious Savers have begun saving for retirement (61%). Indeed, nearly one-half of this group has accumulated between $25,000 and $100,000 for their retirement (45%). Most who are saving are confident that they are investing their retirement savings wisely; however, many do not enjoy making these decisions (39%).

Cautious Savers see their retirement income as a mixture of several different sources. They expect that Social Security, a pension, and personal savings from a work-based retirement plan as to be their sources of income in their retirement years.

This group is nervous about the future. Just one-half are confident they are confident they will have enough money to live comfortably in their retirement (51%). While most are confident they will be able to afford the basics, high proportions are not confident they will be able to afford medical care, or long-term care, or have enough money to support themselves no matter how long they live. Cautious Savers are also not confident they are doing a good job of preparing for retirement.

Cautious Planners Savers tend to be younger Baby baby Boomers boomers (between 35 and 44 years old). About one-half are married or have children. Another half are working full-time; , while nearly one out of five are already retired (18%). One-quarter of the members of this group has have obtained a college diploma (27%). Cautious Planners Savers represent all levels of household incomes, with most being middle income (33% between $25,000 and $50,000). About one-quarter each earn lower incomes (27% less than $25,000) or higher incomes (28% $50,000 or more).

Planners (23%)

Nine out of ten Planners think that anyone can have a comfortable retirement, if they just plan and save. The same proportion considers themselves disciplined at saving. More than any other group, Planners indicate they are willing to take financial risk for substantial gain. Planners not only believe a comfortable retirement is achievable, they have instituted their savings plan and are ready to face their future. Half One-half of the Planners expect to retire at age 60 or earlier.

Four out of five have begun saving for retirement (81%). Four out of ten say they have accumulated more than $100,000 for their golden years. Not only is this group saving for retirement, but also two-thirds have tried to figure out how much they will need to have saved to retire when they would like. Planners are motivated and assisted in their planning and saving for retirement by financial advisors. Nearly all are confident they are investing their retirement savings wisely.

When considering sources for their retirement income, Planners look to themselves more than any other group. More than four out of ten are depending on their own personal savings (44%) or personal savings through an employment-based retirement plan (48%). A similar proportion reportA similar proportion reports a pension will be a major source of retirement income (47%).

While a majority of Planners expect to work during retirement, very few believe they will do so because they will need the money. Most say they want to try a different career, stay involved in their field, or just want a satisfying way to spend their time.

Planners have the most confidence in retirement. Four out of five are confident they will have enough money to live comfortably in their retirement (81%). More than four out of five indicate they are confident about nearly every specific aspect of retirement. Like other groups, Planners are less confident they will have enough money to pay for long-term care if they should need it in retirement; however, two-thirds are confident about this aspect (68%).

Most Planners are Baby baby Boomersboomers, with most between ages 35 and 54. This group has a high proportion thatproportion thatwho is marriedisare married; however, they are less likely than other groups to be financially responsible for children. Planners are high achievers. Nearly one-half have graduated from college (46%), including 14% who have obtained postgraduate degrees. They are most likely to be professionals, and one-half report household incomes of $50,000 or higher (47%). This group had has more men than other groups (55%).

Retiring Savers (17%)

This portion of the population has been saving for retirement for a long time, and they are now poised to reap their rewards. Retiring Savers are fiscally responsible, with more than four out of five indicating they are more like savers than investors, ; they pay off their credit cards at the end of each month, and they are disciplined at saving. Many Retiring Savers also believe that if they just save some each month, they will be fine during retirement. They are averse to taking financial risk.

More than four out of five Retiring Savers indicate they personally put aside money for their retirement (84%). While this group shows high confidence in many areas of retirement, a majority is only somewhat confident they invested their retirement savings wisely (56%). Retirement income for this group is an amalgamation of income sources: Social Security, personal savings, savings from work-based plans, and pensions.

At least three out of four are confident about their retirement. This includes three-quarters who are confident in their retirement income prospects and three-quarters who are confident about specific aspects of retirement. As with others, long-term care is the one area where confidence is lower. Just six in ten Retiring Savers are confident they will be able to afford long long-term care.

Those in this group who are already retired report that they are doing better than they expected. On each aspect of retirement, Retiring Savers indicate they are either better or much better now than they expected to be when they retired. Most say they retired when they planned to – —at or about 65 years of age.

Retiring Savers are older Americans, most are either already retired (38%) or nearing retirement age. While many are married, this group has a high proportion of widowers. Very few are financially responsible for children. Most are high school graduates, but a significant proportion graduated from college (31%). Retiring Savers report middle to high household incomes (30% report either between $25,000 and $50,000 or more than $50,000).

These findings are part of the eighth annual Retirement Confidence Survey (RCS), a survey that gauges the views and attitudes of working and retired Americans regarding retirement, their preparations for retirement, their confidence with regard to various aspects of retirement, and related issues. The survey was conducted in March 1998, through 22-minute phone interviews with 1,500 individuals (1,142 workers, 358 retirees) ages 25 and older. Random digit dialing was used to obtain a representative cross section of the U.S. population. This year’s project also includes a special analysis of minority groups, specifically African-Americans, Hispanic-Americans, and Asian-Americans.


The RCS is co-organized by the Employee Benefit Research Institute (EBRI), a private, nonprofit, nonpartisan public policy research organization; the American Savings Education Council (ASEC), a partnership of more than 250 private- and public-sector institutions dedicated to raising public awareness of what is needed to ensure long-term personal financial independence, a part of the EBRI Education and Research Fund; and Mathew Greenwald & Associates, Inc. (MGA), a Washington, DC-based market research firm.

The 1998 RCS data collection was funded by grants from 33 public and private organizations.. Staffing was donated by EBRI, ASEC, and MGA. RCS materials and a list of underwriters may be accessed at the EBRI website: www.ebri.org/rcs.