Retirement Income Plan Key to Satisfaction Among Affluent Retirees

Recent Market Setbacks Cause Shift in Priorities
BOSTON--(Business Wire)--
Affluent retirees surveyed in the wake of recent sharp market declines expressed
significantly lower levels of financial comfort, greater concern about further
major market declines, and higher interest in guaranteed income streams for
retirement than this survey segment did just last August, immediately prior to
the precipitous market sell-off.

The market decline that began to accelerate in September had a clear impact on
respondents` concerns about their financial future, regrets about risky
investments, and priorities in selecting investments going forward, according to
MFS Investment Management`s Retirement Research on Affluent Retirees.

While the market decline brought to light certain changes in retiree attitudes,
respondents in both flights of the survey in summer and fall consistently
expressed higher levels of satisfaction, comfort and optimism if they had a
detailed retirement savings and income plan than those respondents who did not.
Those who retired involuntarily and who had debt when they retired were far more
likely to respond that they found retirement less satisfying than they had
expected, according to the annual survey of this market segment.

The survey was conducted among a sample of retirees aged 55 to 75, who use a
financial advisor, who retired in 2003 or earlier, and who had $500,000 or more
in household investable assets, including retirement funds. Following the
initial survey in August, a second round of surveying among the same demographic
was done in October to gauge respondents` reactions to the market decline.

"Everyone struggles with the issue of being prepared for a secure retirement.
But these findings show once again that investors who take the time with their
financial advisors to work out a detailed plan for their income in retirement
are far more likely to be satisfied with the outcome," said William Finnegan,
Senior Vice President and Director of Global Retail Marketing for MFS Fund
Distributors.

"A substantial number of respondents retired involuntarily or earlier than they
expected. Given the high correlation of this group with those who found
retirement more challenging or less satisfying, we can conclude that it`s never
too early to start discussing retirement income planning with your advisor. This
is only amplified by the market conditions we have seen over the past three
months," Finnegan continued.

Among the most pronounced changes in the October survey from the earlier round,
the percentage of respondents who were either extremely or very concerned about
a major decline in the stock market rose by more than half, to 65 percent in
October from 42 percent in August. Those who were similarly concerned about
investing too aggressively more than doubled, to 23 percent from 11 percent
earlier. Concerns about outliving retirement savings rose to 25 percent from 13
percent.

Respondents also changed their priorities between August and October when asked
what they would have done differently before or since retiring. In the October
sample, significantly more respondents than in August said they would have:

* Taken fewer risks with investments (17 percent, versus 9 percent earlier).
* Spent less in retirement (11 percent, versus 6 percent).
* Invested in principal protection or income guarantee products, like annuities
(12 percent, versus 9 percent).

In October, respondents ranked guaranteed payment stream as the single most
important factor when choosing an investment (35 percent, up from 23 percent in
August). By contrast, 24 percent in August picked ability to make decisions
about how money is invested, diversified and allocated as the most important
factor; in October that response had declined to 19 percent.

Earlier survey work commissioned by MFS in this area showed that advisors on
average recommend that investors begin the retirement income planning process at
least 10 years before retirement, but that nearly half of pre-retirees 55 or
older do not have such a plan in place, and over a third did not have any plans
to discuss the topic with their advisors.

Among respondents to this year`s survey who expressed that they were either
"extremely satisfied" or "very satisfied" with their retirements, the most
frequently cited characteristics were:

* Retired when or later than they had planned (89%)
* $1 million or more in household investable assets (88%)
* Had a detailed saving plan (88%)
* Have a detailed retirement income plan (88%)
* Retired voluntarily (86%)
* Have a pension (85%)
* Don`t support parents or children (84%)

The age bracket with the highest percentage expressing satisfaction was age 65
to 69, at 91%.

Respondents who had detailed savings and retirement income plans also were more
likely to express that their retirement satisfaction had exceeded their
expectations.

Those most likely to express disappointment with their retirements, by contrast,
most frequently cited having retired involuntarily (21%), having debt (13%), and
retiring sooner than expected (11%). The group with investable assets of
$750,000 to $999,999 was the most likely to express disappointment, at 12%.

The groups of retirees who were most likely to find retirement challenging
include those who: are supporting children/parents (18%), have debt (16%), are
under age 65 (16%), have no detailed retirement income plan (14%), and have no
savings plan (14%).

Level of assets did not necessarily correlate directly with satisfaction levels.
While those with $1 million or more in household investable assets were among
the most likely to express satisfaction with their retirements, the next tier,
with $750,000 to $999,999, were among those more likely to be disappointed, even
more so than respondents with $500,000 to $749,999 in investable assets.

"This may reflect the fact that this group in the middle, with three quarters to
a million dollars in assets, has higher expectations but not quite the assets to
realize them. For those in this category who retire with debt, this is a
particular challenge," Finnegan said.

More than a third of the affluent retirees surveyed (37%) have worked in
retirement, with the majority of them saying they have done so to stay involved
rather than because they need the money. Fewer than one fifth of those working
said they did not expect to work in retirement.

More specifically, the most commonly cited reasons for working in retirement
were:

* Stay active/involved (74%)
* Enjoy working (51%)
* Assure extra money if needed (23%)
* Give back to the community (18%)
* Try a different career (16%)
* Save for special purpose (13%)
* Need the money to maintain lifestyle (10%)
* Want benefits associated with paid employment (4%)

"While the majority of respondents appear to be working because they want to,
those who were working out of need were more likely to have retired earlier than
they had planned, or to have debt of $50,000 or more, which again points to the
importance of starting the retirement income planning process early," Finnegan
said.

Reflecting the changing face of retirement, the survey used a broad definition,
asking respondents: "Regardless of whether you are currently employed, do you
consider yourself to have retired from your primary paid occupation or line of
work?"

The sample was obtained through an on-line consumer panel and MFS was not
identified as the sponsor of the survey. The research was conducted by Northstar
Research Partners, an international research consultancy. Northstar Research
Partners is not affiliated with MFS Investment Management or any of its
subsidiaries.

About MFS Investment Management

MFS is a premier global money management firm with investment offices in Boston,
London, Mexico City, Tokyo, Singapore and Sydney. The firm`s history dates back
to March 21, 1924, and the establishment of the first "open-end" mutual fund.
Today, MFS manages $162 billion in assets on behalf of five million investors
worldwide, as of September 30, 2008.

16093.1

© 2009 MFS Investment Management

MFS Investment Management
John Reilly, 617-954-5305
JReilly@mfs.com
or
Dan Flaherty, 617-954-4256
dflaherty@mfs.com

Copyright Business Wire 2009