Are you a Homebody or a High-Timer?
Nationwide Financial study uniquely defines retirement segments, demonstrates need to ‘know thyself’ in planning
COLUMBUS, Ohio —According to a new study released today by Nationwide Financial (NYSE: NFS), 88 percent of Americans are confident they know what it will take to support their lifestyle in retirement. Yet, the updated National Risk Retirement Index, recently announced by the Center for Retirement Research at Boston College, conservatively places 44 percent of the country’s households ‘at risk’ of being unable to maintain their standard of living in retirement. So why the disconnect?
“These findings illustrate the need for people to truly understand what kind of lifestyle they wish for in retirement. While sufficient income will be a necessity, understanding your drivers of happiness so you’re able to plan what your income will be used for differs significantly based on individual priorities,” said Gordon Hecker, senior vice president at Nationwide Financial.
The Nationwide Retirement Decisions Study, conducted with Mathew Greenwald & Associates, found that individuals near or in retirement fell into one of five segments: High-Timers (34 percent of respondents), In-the-Moments (22 percent), Self-Sufficients (17 percent), Homebodies (16 percent) and Connecteds (11 percent). The survey polled 500 people aged 55 to 70, half working and half retired.
“There’s no such thing as a ‘one-size-fits-all’ retirement,” said Hecker. “Individuals should assess their personal priorities and understand internal motivations when developing their retirement savings and spending plans. Basing these plans on the lifestyle you want in retirement is key to ensuring – and affording – happiness in your later years.”
According to the survey results, each of the five segments differed in what they found to be most important at this stage of their life (traits are listed in order of importance to segment):
The High-Timers focus on themselves and:
• Want to maintain lifestyle and be able to afford extras
• Want to afford nursing home care
• Have less concern with leaving an estate
• Are less concerned with assisting children
• Do more planning for retirement
The In-the-Moments are less likely to think about the future, but
• Focus on current needs
• Want to maintain lifestyle and afford extras
• Have less concern with nursing home care
• Are less concerned with estate planning
• Do moderate retirement planning
Self-Sufficients focus on their own survival and:
• Want to maintain their currently lifestyle but are willing to give up luxuries
• Care about nursing and health care
• Want to stay in their homes
• Are less concerned about leaving money or assisting children financially
• Are more likely to already be retired
Homebodies are home and family-oriented, and:
• Place importance on staying in current home
• Are focused on children
• Expect to live on less and spend less in retirement
• Are less concerned about nursing or health care
• Expect to live shorter lives
Finally, the Connecteds want to take care of themselves and their
• Feel it’s important to have extras
• Care about nursing care
• Want to help and leave money to offspring
• Are willing to sacrifice their home
• Are likely to work longer
“As indicated by the segments, people want different things out of life, which will impact their level of happiness and correspondingly how they should prepare for retirement,” said Mathew Greenwald, President and CEO, Mathew Greenwald & Associates. “For example, a ‘High-Timer’ who wants to afford extras may need to work a little longer than a ‘Homebody’ who expects to spend less in retirement. Americans need to adjust their retirement thinking and strategies according to what ultimately makes them happy.”
“The key to a good retirement is summed up in the age-old wisdom: ‘know thyself,’” said Hecker. “With nearly 50 percent of the country financially unprepared for a secure retirement, consumers need to take steps to understand themselves and to better prepare, regardless of which category they fall into. The sooner people understand their goals for retirement the sooner they can begin preparing for the retirement they want.”
The new research is a continuation of Nationwide Financial’s efforts to help empower consumers, regardless of income or financial sophistication, with clarity around the path to retirement. The company recently launched RetirAbility CheckSM, a free online resource that provides users with a simple, fun and engaging way to measure their retirement readiness. Visit www.nationwide.com/RetirAbilityCheck for more information.
About Nationwide Financial®
Nationwide Financial Services, Inc. (NYSE: NFS), a publicly traded company based in Columbus, Ohio, provides a variety of financial services that help consumers invest1 and protect their long-term assets, and offers retirement plans and services through both public- and private-sector employers.
It’s part of the Nationwide group of companies, which offers diversified insurance and financial services. The group is led by Nationwide Mutual Insurance Company, which is ranked No. 98 on the Fortune 100 based on 2005 revenue.2 For more information, visit www.nationwide.com.
Nationwide, the Nationwide Framemark and Nationwide Financial are federally registered service marks of Nationwide Mutual Insurance Company.
1 Nationwide Investment Services Corporation, member NASD. In MI only: Nationwide Investment Svcs.
2 Fortune Magazine, April 2006
© 2007, Nationwide Financial Services, Inc. All rights reserved