Do you have the personality to retire rich – and stay that way?
Your personality and other personal traits may affect more 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, a study published in Monday in the journal Psychology and Aging.
Two traits – conscientiousness (for example, you are organized, thorough, valuable and cautious) and financial self-efficacy (which is a sense of resilience and control over financial situations) – had the strongest direct relationship with the rate at which people withdrew from their savings accounts in retirement. People with these properties retreated at a much slower rate.
Meanwhile, people who are more open to new experiences (for example, those who are creative, imaginative, adventurous and ious curious); more convenient (for example, those who are compassionate, caring, warm and helpful); and more neurotic (for example, people who are often anxious, anxious, moody, and not calm) were more likely than others to withdraw from retirement savings at a higher rate.
And people who have experienced a lot of negative emotions in the past month – such as fearful, frightened, anxious, frustrated, guilty, shameful, boring, hostile, nervous, nervous, sad or distressed – are also more likely to withdraw at a higher rate.
Possible causes? "Greater neuroticism and negative emotions can result in impulsive financial behavior and poor timely investment decisions," study author Sarah Ashebedo and a professor of financial planning at Texas Tech University told MarketWatch about these findings. "Those who are in greater agreement tend to be warm, compassionate, accommodating and caring and can therefore prioritize giving financial support to others (eg friends, family, charities) to save money on their accounts." .
And, she adds: "Research shows that those with greater openness tend to put less value on material goods and more on experience, but also demonstrate impulsivity and less cautious cash management behavior, which may again result in higher rates of withdrawal. "
The study looked at personality data from more than 3,600 people age 50 or older from the United States (average age was 70) and paired these with tax data from the same participants.
The study's authors – Asbedo and Christopher Browning, also a professor of financial planning at Texas Tech University – warn that higher withdrawal rates are not always a bad thing. "A higher portfolio withdrawal rate is worrying if it puts the individual on the road to run out of money early. However, if a higher portfolio withdrawal rate does not run the risk of running out of money, then it can make life a lot easier for them, "Asbedo said in a statement.