Do you have the personality to retire rich – and stay that way?
Your personality and other personal traits may have a greater impact on how quickly you spend your retirement savings than factors such as your age, marital status, desire to leave an inheritance, and whether you continue to work during retirement, according to a study. which was published. Monday in the journal Psychology and Aging.
Two traits – conscience (for example, you are organized, conscientious, hardworking, and careful) and financial self-efficacy (which is a sense of resilience and control over financial situations) – has the strongest direct relationship with the level at which people attract themselves from their retirement savings account. People with these qualities withdraw 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 pleasant (for example, those who are sympathetic, caring, warm and helpful); and more neurotic (for example, people who are often nervous, anxious, moody, and uneasy) are more likely to withdraw from their retirement savings than others.
And people who have experienced a lot of negative emotions in the past month – such as fear, fear, annoyance, frustration, guilt, shame, bored, hostile, nervous, nervous, sad or depressed – are also more likely to withdraw at a higher level. rate.
Possible reasons? "Greater neuroticism and negative emotions can lead to impulsive financial behavior and investment decisions that are not timely," Sarah Asebedo, a study author and financial planning professor at Texas Tech University, told MarketWatch about these findings. "People who are bigger in agreement tend to be warm, sympathetic, accommodating, and caring and can therefore prioritize providing financial support to other people (eg, friends, family, charity) rather than saving money in their account."
And, he added: "Research shows that those who have higher openness tend to place less value on material goods and more on experience, but also show impulsive and unwise money management behavior, which again can produce a level of higher withdrawal. "
The study looked at personality data from more than 3,600 people in the US aged 50 or over (average age 70) and paired it with tax data from the same participants.
The study authors – Asebedo and Christopher Browning, also a professor of financial planning at Texas Tech University – cautioned that higher withdrawal rates are not always a bad thing. "A higher portfolio withdrawal rate involves putting individuals on the path of running out of money too early. However, if a higher level of portfolio withdrawal does not have the risk of running out of money, it is possible to facilitate a life that is well lived, "Asebedo said in a statement.