Got Personality? See How It Could Affect Your Financial Plans

We all have a personal financial advisor who accompanies us everywhere and sometimes doesn’t act in our best interests. Who is this person? Look in a mirror. What you’ll see is that personality often influences how you save for the future. In fact, according to the Employee Benefit Research Institute, investors tend to fall into one of the following five categories:

Planners: Members of this category are disciplined savers willing to take on risk to pursue their financial objectives. They enjoy financial planning and are the most likely to have done a retirement needs calculation and be ahead of schedule or on track in saving for their later years. They expect to rely on personal savings and investments as a primary retirement income source.

Savers: Although they’re money conscious people who rarely experience financial setbacks, savers are often unwilling to take financial risks. More than 90% conduct research before buying a big-ticket item, and 81% are confident that they will accumulate enough money to finance a comfortable retirement.

Strugglers: Members of this group are the least likely to plan for retirement, yet they can be disciplined savers. They are the most likely to think that they’ll have a comfortable retirement if they just save a little each month. However, most are behind schedule in saving for this financial goal.

Impulsives: Although they believe a comfortable retirement is possible and are risk takers, impulsives’ lack of financial discipline often deters them from saving for the future. They are the most likely to experience financial setbacks and the least likely to pay off credit cards each month.

Deniers: Lack of planning (for either short- or long-term financial goals) is a common characteristic of this group. The majority do not conduct research and plan for a big purchase, and they are the most likely to have saved nothing for retirement. Their expected main source of retirement income? Social Security.

Curious about where you fit? You can take a free Retirement Personality Profile quiz, found in the Savings Tool area of the American Savings Education Council website at www.asec.org.

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