September 19, 2012 (PLANSPONSOR.com) – The number of U.S. consumers making financial preparations for retirement fell to 70%, the lowest in three years, according to a retirement readiness index released by Ameriprise Financial.
The New Retirement Mindscape 2012 City Pulse index examines the 30 largest U.S. metropolitan areas to determine where consumers are the most prepared for and confident about retirement and tracks national and local retirement trends over time. Hartford-New Haven, Connecticut, (No. 1), San Diego (No. 2) and Minneapolis-St. Paul (No. 3) claimed the top three spots on the third annual index while Washington, D.C., (No. 30), Charlotte, North Carolina, (#29) and Indianapolis (No. 28) ranked lowest.
Several things set apart the top-ranked metros. Residents of Hartford-New Haven, Connecticut, San Diego and Minneapolis-St. Paul are significantly more likely to say they are making financial preparations, including setting aside money for retirement, determining how much they need to save and consulting with a financial adviser. Perhaps as a result, they are also much more likely to feel on track and financially prepared for retirement.
In top-ranked Hartford-New Haven, Connecticut, three-quarters (75%) of residents say they have set aside money for retirement, compared with 63% of people nationwide. Nearly half (49%) report feeling on track for retirement—the most of any metro—and a sentiment expressed by significantly fewer consumers across the U.S. (37%).
However, despite the efforts they have made from a financial standpoint, residents of these areas are only on par with the rest of the nation with regard to planning for the activities they would like to pursue during retirement—a fact that may leave them less prepared than they actually feel. In fact, in third-ranked Minneapolis-St. Paul, where residents report the highest levels of financial preparation, only 18% say they have given a lot of thought to where they might live in retirement and how they plan to rest and relax.
While the story is not as positive for the bottom-ranked metros, it may not be as grim as it initially seems. Indianapolis and Washington, D.C., are on par with the national average with regard to financial preparation, while Charlotte scores just slightly below. However, residents of these metros report a significant lack of confidence in their ability to reach their retirement goals.