What Drives People to Retire Isn’t What You Think; Fidelity Research Busts Key Myths

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BOSTON–(BUSINESS WIRE)–Contrary to popular belief, nearly half of American workers plan to stop
working on a specific date, regardless of how much they have saved for
retirement. This is one of several myths debunked in new research1
from Fidelity Investments® in collaboration with the Stanford
Center on Longevity.

The survey, one of the largest of its kind, is based on responses from
more than 12,000 retirement savers and recent retirees, age 55 or older
and uncovers the most important financial, social and emotional factors
that contribute to an individual’s decision to retire or stay on the
job. The survey opens a new window into the non-financial factors that
influence the retirement decision, such as how employees feel about
their jobs and coworkers, their desire to spend time with family and
grandchildren, and their overall health and the lifestyle they want when
they leave the workforce.

“Fidelity has always had unmatched financial data to illustrate
retirement trends and behaviors. This research complements our analytics
and provides deeper insight on how people think and feel about the
transition to retirement,” said Jim MacDonald, president, Workplace
Investing, Fidelity Investments. “It’s critical that employers
understand these factors and design benefits to either retain or help
transition pre-retirees based on their workforce strategy.”

Retirement Myths – Top Misconceptions about What/How People Think
About Retirement

The research results contradict many of the
commonly-held beliefs about how people view retirement and what factors
contribute to their decision to retire (or not retire). Here are several
of the myths and misconceptions that emerged from the research:

1. MYTH: People won’t retire until they have enough money.
One of the more surprising results from the research is that nearly half
of respondents don’t link their retirement to their level of savings.
When asked if time or money was more important in their decision to
retire, results were surprisingly split – nearly half (49 percent)
indicated that their retirement date is not tied to money or a specific
level of savings, but to a specific date. They want to ensure they have
enough time to enjoy their retirement, and if necessary, plan to adapt
their retirement lifestyle based on how much they have saved. The
remaining 51 percent of respondents indicated that their finances will
determine when they retire, and that they want to have enough savings to
enjoy their retirement.

2. MYTH: Retirement means spending time with your spouse.
While a healthy percentage of men want to spend time with their wives
(nearly 60 percent), a greater number of women are more interested in
spending time with their grandchildren (nearly 70 percent) than with
their husband (43 percent).

3. MYTH: Many retirees are struggling to get by and living
with regret.
Despite the misconception that today’s retirees are
unhappy and forced to live a frugal lifestyle, 82 percent of recent
retirees felt they retired at the right time, and 85 percent feel
retirement is the most rewarding time of their lives. In addition, 79
percent indicate that it is easier than they thought to live comfortably
in retirement – they were able to manage their savings and adapt their
lifestyle based on their finances, if necessary. However, 36 percent
admit they wished they had saved more, and 33 percent wished they had
started saving earlier.

4. MYTH: People work in retirement because they have to.
When asked why they are working in retirement, 61 percent of respondents
indicated that “they like what they do,” and nearly half (48 percent)
added that “feeling valued” was an important reason to continue working
in retirement.

5. MYTH: Retirement is all about traveling and pursuing
hobbies.
While some retirees indicated that they plan to volunteer
and pursue activities they couldn’t get to while they were working,
almost three quarters (72 percent) said their top reason to retire was
to have more leisure time – the freedom and flexibility to do whatever
they wanted, even if that was nothing more than relaxing.

This research will also help inform Fidelity’s new Financial Wellness
program. Our Financial Wellness program offers education and tools to
help employers address a broad variety of financial needs across a
multi-generational workforce, including budgeting, managing debt, saving
for college or managing social security benefits.

“The myths and misconceptions exposed in this study will be especially
useful to employers, as it highlights the need to add new dimensions to
the guidance and benefits they provide their employees,” added
MacDonald. “This study tells us that we need to address multiple aspects
of an individual’s overall financial wellness as they prepare for
retirement and not just look at the single dimension of retirement
savings.”

This survey marks the latest collaborative effort between Fidelity and
the Stanford Center on Longevity, which examines a variety of topics
related to life expectancy and researches innovative ways to bring about
profound advances in the quality of life from early childhood to old
age. Combining Fidelity’s knowledge on retirement savings behavior with
the Center’s expertise on longevity provides unique perspective on some
of the major of retirement savings issues facing society today and can
help employers continue to meet the evolving needs of their aging
employee populations.

About Fidelity Investments

Fidelity’s goal is to make financial expertise broadly accessible and
effective in helping people live the lives they want. With assets under
administration of $5.0 trillion, including managed assets of $2.0
trillion as of September 30, 2015, we focus on meeting the unique needs
of a diverse set of customers: helping more than 24 million people
invest their own life savings, nearly 20,000 businesses manage employee
benefit programs, as well as providing nearly 10,000 advisory firms with
technology solutions to invest their own clients’ money. Privately held
for nearly 70 years, Fidelity employs 42,000 associates who are focused
on the long-term success of our customers. For more information about
Fidelity Investments, visit https://www.fidelity.com/about.

Keep in mind that investing involves risk. The value of your investment
will fluctuate over time and you may gain or lose money.

Fidelity Brokerage Services LLC, Member NYSE, SIPC
900
Salem Street, Smithfield, RI 02917

Fidelity Investments Institutional Services Company, Inc.
500
Salem St., Smithfield, RI 02917

740453.1.0

© 2015 FMR LLC. All rights reserved.

1 Fidelity Investments Decision to Retire Research
represents insight from a series of in-depth interviews conducted in
Boston, Chicago and San Francisco (April 2015), and an online survey
of more than 12,000 defined contribution plan participants recordkept by
Fidelity, ranging in age from 55 – 80 across all industries’ and income
levels, who felt they had some control over their decision to retire.
The research was completed in August 2015 by Greenwald & Associates,
Inc., an independent third-party research firm. Fidelity also worked in
collaboration with the Stanford Center on Longevity on the study.

Contacts

Fidelity
Corporate Communications, 617-563-5800
fidelitycorporateaffairs@fmr.com
or
Mike
Shamrell, 617-563-1996
michael.shamrell@fmr.com