Many consumers may be overly optimistic about how prepared they are for retirement

More than one-quarter of consumers may be overly optimistic about how well they are planning and saving for retirement, according to a Wachovia Retirement Fitness study.

The comprehensive survey of 2,100 consumers nationwide revealed that 26% of consumers feel confident about retirement planning and consider themselves experienced investors, yet they may need to do more to prepare. The survey showed that many of these individuals, when compared to those who are better prepared, typically do not have a retirement savings strategy and are saving less in 401(k) plans and IRAs.

Meanwhile, nearly half of consumers are emotionally concerned over planning and saving for retirement. This includes 36% who may not be doing enough to prepare, and 11% who appear to be in better shape but are still worried. The top three emotions these consumers describe are uncertainty about how to best prepare for retirement, worry about having enough savings at retirement and fear of making a mistake with their retirement savings. The majority of these consumers also feel they will need to work during retirement.

The Retirement Fitness study examines consumers’ emotions along with their actions, or what they are doing to prepare for retirement. Four retirement fitness categories were developed from the results. A short assessment is available on http://www.wachovia.com/retirementfitness to help individuals determine their category. The fitness categories include:

• Fitness evaluation may be useful (26% of respondents). Consumers in this group are not concerned about their retirement savings, even though they may not be as financially fit for retirement as they think. They tend to see themselves as experienced investors and prefer to do investing on their own. They admit they could be saving more and are generally optimistic about their job security and the future of Social Security and pension plans.
  
• At the starting line (36%). Consumers in this group are concerned about saving for retirement and may not be doing enough to prepare. Though many are financially able to save more, nearly half say they prefer to enjoy life now rather than save for the future. They tend to consider themselves inexperienced investors and feel they will need to work during retirement.
  
• Looking fit (11%). Consumers in this group are concerned about saving for retirement but they appear to be on the right track. More than any other group, they are likely to feel overwhelmed with too many choices of where and how to invest. They tend to consider themselves inexperienced investors but are willing to make sacrifices to save for retirement.
  
• Peak Performer (27%). Consumers in this group are not concerned about retirement and appear to be on the right track. They tend to consider themselves experienced investors and are willing to make sacrifices to save for the future. They are less likely to feel the need to work during retirement.