The New Retirement Mindscape^®

The Ameriprise Financial New Retirement Mindscape study is the first to explore people's attitudes, worries, behaviors ambitions and needs before and after retirement. Due to a significant increase in life expectancy, retirement is lasting longer than ever before and has become one of our most complex and momentous life transitions.

Retirement is no longer "one size fits all", nor is it a single event. The New Retirement Mindscape study uncovered a progression of five distinct stages that people migrate through before and during retirement: Imagination, Anticipation, Liberation, Reorientation and Reconciliation.

Each stage has its own complex emotions and needs - impacting every other area of a person's life, including family relationships, workplace experiences, community involvement and financial situation. While there are numerous books on life transitions, such as pregnancy, grief or loss, none are devoted to the most complex life stage - retirement.

Stage 1 - Imagination (15-six years prior to retirement)
The first stage of retirement, Imagination, usually begins when people are in their 40s, approaching their peak earning years. They experience higher expectations about retirement and increase the amount of attention spent on retirement planning. They begin to develop a clearer vision of what they want out of their retirement and start to create their own "roadmap." During this stage, individuals are likely to seek out the advice of a financial professional to help them make plans for achieving their retirement dreams. As the vision of their retirement becomes clearer, more consumers expect to feel enthusiastic (77 percent) and happy (88 percent) in retirement as compared to earlier years. Expectations of feelings of empowerment (65 percent) increase as well.

Stage 2 - Anticipation (five years prior to retirement)
The next stage, Anticipation, takes place in the years just prior to retirement. This stage is a time of great excitement and hopefulness — emotions that continue to intensify, as people get closer to their actual Retirement Day. In fact, most (80 percent) feel that they will be "able to achieve their dreams during retirement." Financial resources are almost in place and people begin to spend additional time planning for recreation, new hobbies, family and even post-retirement careers. However, in the year or two just before Retirement Day, as people stand at the threshold of retirement, there is a resurgence of worry as 22% say they will feel a sense of loss and 18% expect to feel "emptiness" when their working years are over.

Stage 3 - Liberation (Retirement Day and the year following)
Retirement has arrived. The Liberation stage is a time of great enjoyment, enthusiasm, and hopefulness, yet surprisingly lasts only about one year. People told us that on Retirement Day they were either excited (49 percent) or relieved (24 percent). They said they felt liberated from many of their worries and responsibilities, and that they are living their retirement dream. This is the honeymoon phase of retirement. Though they admit they miss their friends and social connections from work, people in this stage are fully engaged in everything their new freedom has to offer: Reconnecting with spouses and families, hobbies, traveling, even starting new businesses.

Stage 4 - Reorientation (two to 15 years after retirement)
After an initial period of Liberation, people transition into a stage of Reorientation. During this time, which can last up to 15 years after Retirement Day, the data show that there may be an emotional let-down in this stage. People discover that retirement is often more challenging or just different from what they expected. Health and financial worries weigh more heavily while others complain of depression, worry and boredom.

However, planning, preparation and a clear vision of their retirement potential can help empower people to make this a more satisfying time in life. We uncovered four distinct experiences within the Reorientation stage: Empowered Reinventors (19 percent), Carefree Contents (19 percent), Uncertain Searchers (22 percent) and Worried Strugglers (40 percent).

• Empowered Reinventors (19 percent) find this stage a time of adventure, new challenges and fulfillment. In fact, this may be our first glimpse of how the baby boom generation will experience retirement. Empowered Reinventors are the most likely to say they feel adventurous (70 percent) and empowered (56 percent). In addition, they are the most likely to say that doing more meaningful or satisfying work is very important to them (43 percent).
• Carefree Contents (19 percent) are reorienting successfully to a new time in their lives, but they differ from Empowered Reinventors in that they are content to simply adjust to a less frantic lifestyle without the stresses of work and juggling multiple responsibilities.
• Uncertain Searchers (22 percent) are still trying to figure out what to make of this time in their lives and they report mixed feelings about their retirement.
• Worried Strugglers (40 percent) are having a difficult time in this stage and are more likely to admit worry, boredom, sadness and fewer aspirations. Lack of planning and preparation likely played a role in this uncertainty. This group is most likely to say that they gave little forethought to what they wanted to do during their retirement years.

The most interesting of these groups is the Empowered Reinventors who stand out as role models and may even be our first indication of how baby boomers will reinvent retirement. Compared to most others, Empowered Reinventors have been the most proactive about planning and preparation for travel, spending time with their families, volunteering and ensuring a healthy lifestyle in retirement. For them, this stage immediately following retirement becomes a time of adventure, empowerment and fulfillment. They may no longer be in a full-time career, but they have changed gears and re-engaged in a wide range of new activities. Additionally, engaging in hobbies, traveling and enjoying their newfound freedom from the daily grind are all priorities.

Stage 5 - Reconciliation (16 or more years after retirement)
This stage is marked by increased contentment and acceptance of the reality of retirement. During this stage, respondents are positive about retirement, 65 percent report that they are living their retirement dream and 75 percent are enjoying it a "great deal." They begin to set their sights on the possibility of moving to a new home or an entirely different location. They report lower levels of depression (five percent), though they are more likely to admit sadness as they begin to confront end-of-life issues with their families (22 percent).

Harris Interactive fielded the New Retirement Mindscape via a telephone survey in August 2005 to 2,000 adults ages 40 to 75. For more information, and a complete methodology, visit ameriprise.com.

Financial advisory services and investments offered through Ameriprise Financial Services, Inc., Member FINRA & SIPC, an Ameriprise Financial company.

*SRIC-BI's 2004 - 2005 MacroMonitor