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February 23, 2022

What does your retirement plan look like?

As North America shifts from a society of shared risk to one of personal responsibility, retirement starts to look a little more gloomy for many.  

Prospective retirees are being asked to rely less on guaranteed retirement income provided by government and defined benefit plans, less on the health care coverage supplied by Medicare and an employer-based health insurance system, and more on their own, self-funded retirement security.

And that means some serious planning, suggests research from the MetLife Mature Market Institute, which argues that too many people allow themselves to lured into a false sense of security.

What does your retirement plan look like?

The most successful planners are those that take into account unanticipated problems, like having to retire early because of health issues or job loss, losing their health insurance before they're old enough for drug coverage or needing long-term care. To say nothing of a lost decade in stocks and record low interest rates on savings.

Overall, the study identified 10 types of planners:

  1. Snoozers who simply don't think about future risks at all.
  2. Active resisters who "choose to snooze"  and generally ignore information about future risks.
  3. Immobilized worriers who understand future risks, but whose worry prevents them from acting.
  4. Oversleepers who are late in their thinking and planning and feel their window has "come and gone."
  5. Wood knockers who think about the unexpected but rely on hope that things will "work out."
  6. Plan B-ers who hold on to a flimsy "contingency" plan as a protection against trouble ahead.
  7. Realists who use the lessons of past experience to think about the future.
  8. Stewers and Brewers who fuss but are eventually willing to consider ideas and strategies.
  9. Compromisers who carefully balance their current needs against future risks.
  10. Pre-emptive planners who strive to preempt future risks, or at least offset their consequences.

Where do you fit in? Has your approach changed over time?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...