Please Install Flash Player
11/01/2005 NORTHBROOK, Ill -
The manner in which Americans save for retirement is a reflection of their individual personalities, according to the 2005 Allstate "Retirement Reality Check" survey.
Simply put, measuring specific actions people take to save for retirement, coupled with their attitudes about retirement, generated five distinct personalities in the 2005 survey. Interestingly, people's attitudes don't always mesh with the actions they've taken to prepare financially for retirement.
The fifth annual Allstate survey asked Americans which of 10 specific steps they have taken to save for retirement. Those responses were cross-referenced to responses about attitudes toward retirement, confidence in financial preparation and specific fears about life after retirement. The various combinations of actions and attitudes yielded the five personality types.
"It is easy to look at people's track records, but in order to help improve their savings habits, we also need to understand what motivates and worries them," said Casey Sylla, president, Allstate Financial, a business unit of The Allstate Corporation. "These findings give unusual and clear insight into how people view themselves, which is the first step toward understanding why they save the way they do."
The survey showed that people's attitudes do not always mirror their actual savings habits, said Mathew Greenwald, Ph.D, president of Mathew Greenwald & Associates, the Washington, D.C.-based firm that conducted the survey for Allstate.
"We find that a significant number of people have extreme optimism about their habits and their futures, but in fact have not saved enough money to justify that attitude. We also found one segment that is far more pessimistic about their prospects than their actions justify," explained Dr. Greenwald.
The five "Colors of Savers" identified in the 2005 Allstate "Retirement Reality Check" survey are:
Green: The Color of Retirement Readiness
(20 percent of survey respondents)
This group is most prepared financially and emotionally for retirement, having taken at least nine of the Ten Steps to Retirement Savings. Greens tend to be educated and relatively well-off, and they have good financial habits. As survey respondents age, they're more likely to fall into this group. Not surprisingly, Greens are most likely to be looking forward to retirement, and their savings success gives them a green light to the retirement lifestyle they want. Among men, 21 percent are Greens, compared with only 16 percent of women.
Blue: The Color of Retirement Worry
(27 percent of survey respondents)
Members of this group need to take a tougher look at their savings program. While they say they've done eight of the Ten Steps to Retirement Savings, the amount they've actually socked away is far less than the Greens. They talk the talk - they call themselves disciplined and good savers - but they just don't walk the walk. And they know they fall short because Blues do, indeed, have the blues. This group is defined, not by income or education, but by worry - 48 percent look to retirement with apprehension, and 7 percent say they dread it.
Yellow: The Color of False Sunshine/Optimism
(19 percent of survey respondents)
Members of this group need to get their savings program into sync with their attitudes. Simply put, Yellows are merry optimists about their financial outlook, with only 20 percent saying they're worried about how to finance their retirement. But their savings habits are cause for alarm. They've taken only half of the Ten Steps to Retirement Savings, and 56 percent have socked away less than $100,000. This is worrisome because 51 percent of Yellows are 45 or older, so there isn't a lot of time to pick up the slack.
Orange: The Color of Avoidable Risk
(21 percent of survey respondents)
This group is at high risk of a financial shortfall in retirement because they've only taken four of the Ten Savings Steps. Unlike the Yellows, this group is extremely pessimistic, with 64 percent looking to retirement with apprehension or dread, and 86 percent worried about financing retirement. But Oranges are relatively young - 40 percent are younger than 35 - so they have time to get on track. And they probably know where to start…members of this group admit they spend money carelessly, with 43 percent saying they often regret things they buy, and 36 percent saying they buy things to make themselves feel better.
Reds: The Color of Danger
(13 percent of survey respondents)
Reds say they are in difficult financial straits right now, with 70 percent worried about current finances. Only 34 percent of this group consider themselves good savers, and only 25 percent say they stick to a budget. More than half have saved less than $50,000, and 21 percent has less than $10,000. Reds tend to have less education and make less money than members of other groups, and they're extremely pessimistic about their outlook. Reds overwhelmingly worry about financing retirement (78 percent) and believe they'll likely have to work in retirement (67 percent). Understandably, 57 percent look to retirement with apprehension, and 15 percent with outright dread, far more than any other group.
"What is most interesting is the lack of correlation between individuals' level of worry or confidence and their actual savings for retirement," Sylla said. "This survey underscores that people's emotions and attitudes-even if they are based on misconceptions-can be savings barriers that are as significant as income or expenses."
Download the mini executive summary (You Are What (and How) You Save - (PDF)) of the Allstate "Retirement Reality Check" survey.
Allstate created the fifth annual Allstate "Retirement Reality Check" survey in conjunction with Mathew Greenwald & Associates. Using a random digit dialing methodology, Greenwald & Associates polled 1,601 people born between 1946 and 1978, with household incomes of $35,000 or more. Retirees were accepted with incomes of at least $20,000. The margin of error (at the 95 percent confidence level) for the total number of respondents in this study is ±2.5 percent, ±3.8 percent for information specific to Gen Xers, ±4.5 percent for Baby Boomers, and ±5.0 for Silent Generation.
Allstate Life Insurance Company, Lincoln Benefit Life Company and American Heritage Life Insurance Company (Allstate Workplace Division) are proud members of the Insurance Marketplace Standards Association - IMSA. Our membership signifies our commitment to honesty and fairness in the sales and service of individually sold life insurance and annuity products.
The Allstate Corporation (NYSE: ALL) is the nation's largest publicly held personal lines insurer. Widely known through the "You're In Good Hands With Allstate®" slogan, Allstate helps individuals in approximately 17 million households protect what they have today and better prepare for tomorrow through approximately 13,600 exclusive agencies and financial professionals in the U.S. and Canada. Customers can access Allstate products and services such as auto insurance and homeowners insurance through Allstate agencies, or in select states at allstate.com and 1-800 Allstate®. EncompassSM and Deerbrook® Insurance brand property and casualty products are sold exclusively through independent agents. Allstate Financial Group provides life insurance, supplemental accident and health insurance, annuity, banking and retirement products designed for individual, institutional and worksite customers that are distributed through Allstate agencies, independent agencies, financial institutions and broker-dealers.
FOR MORE INFORMATION:
Rebecca Hirsch, Media Relations, (847) 402-5600