Pre-emptive retirement planning

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There is more than one way to skin the retirement planning cat.

For instance, while I was walking on the beach this morning — we’re vacationing in Florida this week — a fellow with a metal detector came by. He told me he uses his finds to augment his income. In the past month, he said he’d found “a couple of rings and a silver bar.”

This morning a 100-gram silver bar was worth $102.70. Not a bad return for a few hours of walking on the beach, but I’d hate to have to depend on it.

If you don’t think you can rely on something like a metal detector to pay the bills, then you better figure out a better way. The MetLife Mature Market Institute studied how people plan for retirement and concluded that people who do the most successful retirement planning take into account unanticipated problems, like having to retire early because of health issues or the loss of a job, losing their health insurance before they are old enough for Medicare, or needing long-term care and the vagaries of the stock market.

Overall, the study identified 10 types of planners:

  1. Snoozers who don’t think about future risks at all. Future risks are not on their radar screens.
  2. Active resisters who “choose to snooze,” or choose to ignore information about future risks.
  3. Immobilized worriers who understand future risks, but whose worry prevents them from acting.
  4. Oversleepers who are late in their thinking and planning and may regard their decision or action windows as “come and gone.”
  5. Wood knockers who think about the unexpected but rely on hope; they choose optimism. Somehow, things will “work out.”
  6. Plan B-ers who hold on to a contingency plan, or the loose idea of one, as a protection against trouble ahead. A Plan B may be a “plan” in name only.
  7. Realists who use the lessons of past experience to think about the future.
  8. Stewers and Brewers who take a while to make decisions. Stewers may fuss and fret, while Brewers play with ideas and planning strategies.
  9. Compromisers who think about today and tomorrow and balance their current needs against future risks.
  10. Pre-emptive planners who strive to preempt future risks, or at least their consequences.

Gerontologist Sandra Timmermann, who directs the institute, says no one plans for retirement perfectly, but aiming to be a pre-emptive planner is the best goal. And couples who work together to put together their preemptive plan are most likely to succeed. “While we’ve witnessed trends away from marriage over the past decade, we found in this data that two people who communicate have an advantage. In addition to the likelihood of two incomes in a dual-person household, we have evidence that two heads are better than one. Couples who work together to save and find the right financial vehicles to help them through the ‘decumulation’ phase make the most progress,” she said.

And if all else fails, maybe I’ll buy a metal detector.