US consumers reconsider retirement

McKinsey has just published some research about how the recession has affected Americans views about when they intend to retire.

The company publishes something it calls the Retirement Readiness Index. This measures the financial preparedness of households to retire. It is currently at 63, whilst 100 represent the level necessary to maintain a current standard of living. A figure of 80 represents what is is necessary to avoid making large reductions in spending on basics needs such as housing, food and health care.

The above chart shows the attitude of different types of people to their retirement plans.

Note that the high net worth group is the one intending to delay their retirement the longest.

What does this mean? I guess it is a combination of two things. The high net worth group probably has more opportunities to extend their period of time working AND they understand the dire nature of the way the recession has impacted people’s wealth. The Mass Market is living in cloud cuckoo land. Dick Stroud