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%).
- Stage 3: Anticipation (two years prior to retirement)–After questioning their readiness, prospective retirees' excitement begins to build in the final two years leading up to retirement day. People in the Anticipation stage are the most likely to feel "on track" for retirement (77%), possibly because they are also the most likely to be setting aside money in their own savings/investments (83%) and working with a financial advisor (54%).
- Stage 4: Realization (retirement day to one year following)–While the first year of retirement was previously called "Liberation," the optimism and excitement that once accompanied this stage have been muted by the recession. With sharp declines in the value of portfolios, as well as "forced retirements" owing to layoffs and career setbacks, people are struggling with the realities of retirement. The decrease in positive feeling is dramatic–compared with 2005, far fewer are enjoying retirement "a great deal" (56% vs. 78%), say they are living their dream in retirement (45% vs. 68%) or feeling that retirement has worked out as they planned (57% vs. 77%).
- Stage 5: Reorientation (two to 15 years after retirement)–After a difficult year of adjustment, most people enter the Reorientation stage feeling more "happy" (80%) and "on track" for retirement (69%) than they did in previous stages. They continue to enjoy having "control over their time," and to an even greater extent than in 2005. They are also better prepared than they were five years ago–more report that they set aside money for retirement (83% vs. 72%) and are working with a financial advisor (43% vs. 34%).
- Stage 6: Reconciliation (16 or more years after retirement)–While the vast majority of people in the Reconciliation stage continue to feel "happy" (80%), they are experiencing depression at a significantly higher rate than in 2005 (20% vs. 5%). Troubled by the loss of income and social connections, they are among the least likely to say they are enjoying retirement "a great deal" (56%)–and less so than in 2005 (75%).
"Coming out of the recession, it may not be surprising that people–especially those who are closest to their retirement day–are looking at this important milestone differently," Brimhall said in the statement. "However, I'm encouraged to see consumers in some stages take a more proactive approach to planning and saving. I believe that the more people understand the stages of retirement and prepare themselves–emotionally and financially–the more likely it is they'll have the confident and fulfilling retirement they desire."
