Do you have the personality to retire – and stay that way?
Your personality and other personal characteristics may have more impact on how quickly you spend your retirement savings than factors such as your age, marital status, desire to leave a legacy, and whether you continue to work during retirement, according to a study published on Monday in the journal Psychology and Aging.
Two traits – conscientiousness (for example, you are organized, thorough, hardworking and cautious) and financial self-efficacy (which is a sense of resilience and control over financial situations) – had the strongest direct relationship to the rate at which people pulled back from their retirement savings accounts. People with these traits retreated at a much slower rate.
Meanwhile, people who are more open to new experiences (for example, those who are creative, imaginative, adventurous and curious); more comfortable (for example, those who are sympathetic, caring, warm and helpful); and more neurotic (for example, people who are often nervous, anxious, moody and not calm) were more likely than others to withdraw from their retirement savings at a higher rate.
And people who experienced very negative emotions in the last month ̵
The possible causes? "Greater neuroticism and negative emotions can result in impulsive financial behavior and poorly invested decisions," said Sarah Asebedo, a study author and a professor of financial planning at Texas Tech University, MarketWatch about these results. "Those who are greater in comfort tend to be warm, sympathetic, accommodating and caring and may therefore prioritize providing financial support to others (eg friends, family, charity) over saving money in their accounts."
And, she adds: "Research indicates that those who are higher in openness tend to place less value on material goods and more on experiences, but also show impulsivity and less cautious behavior with money management, which in turn can lead to higher withdrawal rates. . "
data from more than 3,600 people in the United States aged 50 or older (mean age was 70) and paired it with tax information from the same participant.
The study's authors – Asebedo and Christopher Browning, also a professor of financial planning at Texas Tech University – warn that a higher withdrawal rate is not always a bad thing. “A higher portfolio withdrawal rate depends on whether it places the individual on a path to run out of money prematurely. However, if the higher portfolio withdrawal rate does not run out of money, it could very well facilitate a well-lived life, Asebedo said in a statement.