New Retirement Mindscape®

2013 City Pulse index

Rankings and key findings by metropolitan area

The New Retirement Mindscape®2013 City Pulse index examines the 30 largest U.S. metropolitan areas to determine where consumers over the age of 40 are the most prepared for and confident about retirement. Now in its fourthyear, the index also measures retirement trends over time on both a national and local level.

Metropolitan areas are scored based on responses to a national online survey which compares consumers’likelihood to have determined the amount of money they need to save for retirement and their actual saving habits. The index also takes into account if people have planned for a variety of activities during retirement and expressed confidence about achieving their retirement goals.

1. San Francisco-Oakland-San Jose

Preparation ranking: 2

Confidence ranking: 1

2012 ranking (composite): 4

2011 ranking (composite): 1

2010 ranking (composite): 12

•The San Francisco bay areamaintains its hold in the top five on this year’s index for the third year in a row and locals have consistently set an example for their peers across the nation. Joining San Francisco in the top ten are other California metros San Diego (#6) and Sacramento (#7).

•More than three-quarters (77%) say they’ve taken at least some steps to prepare for retirement compared to only 72% nationally. Higher than average numbers say they’ve contributed to an employer-sponsored plan (57% vs. 51%) or to their own savings and investments (57% vs. 48%).

•San Francisco respondents also report feeling more confident compared to the average American. One-third (35%) agree that they will achieve their dreams while in retirement – much more than the national average (24%). This number has steadily increased since 2010 when only 20% believed they would reach their retirement goals. However one concerning trend in San Francisco is that residents, on average, estimate needing far less in savings to retire with confidence than average Americans (who estimate needing about $500,000 (the median amount cited) to retire confidently).

•Golden Gate City locals may be more confident than people in other major U.S. metros, but this doesn’t mean they aren’t concerned about the healthcare changes and other potential financial issues. They are significantly less likely than their peers nationwide to say they are concerned about pending health care changes due to the Affordable Care Act (41% vs. 68%). However, of those who are concerned, 70% say their biggest concern is paying more for coverage, compared to only 51% nationally who cite this as their main concern.

2. Detroit

Preparation ranking: 3

Confidence ranking: 2

2012 ranking (composite): 17

2011 ranking (composite): 20

2010 ranking (composite): 21

•Despite the fact that the city declared bankruptcy soon after the survey was conducted, Detroit surprisingly broke into the top three this year after hovering near the middle of the index since 2010. The metro has consistently climbed its way up the preparation index and locals’ confidence levels now match their levels of preparation which catapulted them to the top. Perhaps the city’s financial woes gave residents a reality check and prompted them to be proactive about their personal financial situation.

•Nearly four in five (78%) Detroit respondents report taking at least one step to prepare for retirement – the most in four years and many more than the national average (72%). Significantly more Detroit locals than average Americans say they have contributed money to a retirement account other than their 401(k) (56%) and developed a written financial plan (17%).Additionally, one in four (25%) Detroit respondents say they have estimated the amount of money needed to retire, compared to only 18% of their peers in other major U.S. cities.

•These high levels of preparation may be boosting locals’ confidence. The number of people from this metro who say they feel on track for their retirement is much higher than the national average (49% vs. 42%). These numbers may be partially attributable to the fact that more Detroit residents report that they work with a professional financial advisor (38% vs. 29%).

•Despite Detroit locals feeling better about retirement than people in other major U.S. cities, half (50%) admit that their portfolios haven’t yet recovered from the market downturn of 2008-2009. Most cite reasons including that their accounts are simply recovering more slowly than expected (44%) or they’ve had to withdraw from these accounts for emergency or daily expenses (21%).

•And though 44% of locals believe that funding health care expenses will be a challenging financial issue in retirement, 17% have acted proactively by purchasing long term care insurance and another 8% who haven’t yet plan to do so in the next 12 months.

3. Hartford & New Haven

Preparation ranking: 4

Confidence ranking: 3

2012 ranking (composite): 1

2011 ranking (composite): 6

2010 ranking (composite): 7

•Hartford and San Diego are the only metro areas that have remained in the top ten on the compositeindex since 2010, and Hartford continues to set an example for those across the nation preparing to retire.One of the best things that Hartford locals are doing to prepare is asking for help – two in five (40%) say they have a financial advisor compared to only 29% of their peers in other U.S. metros.

•Nearly four in five (78%) locals say they’ve done at least some preparation for retirement and though this is the lowest number who report doing so locally in four years, it’s much higher compared to the average (72%). On the bright side, more than half of Hartford locals (56%) say they have contributed to their own savings or investments such as IRA, Annuities, or stocks compared to other cities nationally (48%). However locals may be forgetting one important preparation step; only 23% say they have determined the amount of monthly income they’ll need in retirement – a steady decline from the 34% who reported taking this step in 2010.

•Overall, preparation levels in Hartford are high, which may be why residents continue to feel confident about their retirement. Residents are more likely than average to say they feel very confident about their financial future (34% vs. 26%), and three in four (75%) Hartford locals report that they have positive emotions about retirement compared to only67% of their peers nationwide. Specifically, residents are more likely to say thinking about retirement makes them feel empowered than the average American (23% vs. 17%).

•Despite the fact that Hartford residents are less likely to report feeling extremely concerned about the healthcare changes due to the Affordable Care Act than the average American (24% vs. 35%), locals say providing for their health care during retirement is a top concern (41%). Knowing how much to withdraw from retirement savings without outliving their money (39%) and managing investments to safely generate income and growth (38%) are other financial issues that locals expect to be the most challenging in retirement.

4. Minneapolis-St. Paul

Preparation ranking: 5

Confidence ranking: 4

2012 ranking (composite): 3

2011 ranking (composite): 18

2010 ranking (composite): 1

•Minneapolis-St. Paul has appeared in the top five on the composite index for three of the last four years, and residents’ levels of preparation and confidence remain strong. Significantly more Minneapolis respondents than average have contributed to a workplace-sponsored retirement plan (61%) and/or to their own retirement savings accounts (58%). This high level of preparedness may be at least partially attributable to the fact that two in five (41%) Minneapolis locals work with a financial advisor, compared to fewer than one-third (29%) of consumers surveyed nationally.

•Given their high savings rate, it’s not surprising that Minneapolis locals are feeling more confident about retirement than their peers across the nation. Nearly half (49%) say they feel on track for retirement – the most in four years and many more than the national average (42%). They’re also significantly more likely than the average American to report believing that they can achieve their dreams in retirement (34% vs. 24%).

•Respondents in this Midwestern city are experiencing another positive side effect of strong preparation and confidence: affirmative emotions about retirement. Seven in ten (70%) say they feel positively when they think about retirement – the most to admit these sentiments locally in four years. Those who say they feel happy is at an all-time high (53%) while the percentage who report feeling anxious is lower than ever (15%).

•But while the metro is home to many people who say they feel very ready for retirement, half of Minneapolis residents (48%) say their portfolio hasn’t yet recovered from the market downturn in 2008-2009. Those who haven’t seen recovery chalk it up to simply slower growth than expected (41%), job loss (23%) or having had to withdraw from their retirement accounts for emergency or daily expenses (22%).

5. Seattle-Tacoma

Preparation ranking: 11

Confidence ranking: 6

2012 ranking (composite): 13

2011 ranking (composite): 14

2010 ranking (composite): 5

•The Seattle area broke into the top five again this year after landing near the middle of the composite index for the past two years. Locals report having more confidence about their retirement, but slipped a few spots on the preparation index.

•Although their preparation levels remain mostly on par with average Americans, Seattle locals are doing some things right. More Seattle residents than average report that they have determined the monthly income needed to fund their retirement (31% vs. 24%) and 16% have developed a written financial plan – twice as many as in 2011.

•Despite the rainy Seattleweather, people who reside in this city have a sunnier outlook towards retirement. Fewer locals report having negative feelings about this milestone compared to the average American (22% vs. 30% nationally). Seattle respondents are also significantly less likely than last year to say they feel worried (16% vs. 26%) or anxious (10% vs. 19%) about retirement.

•Local residents’ attitudes about funding their retirement have significantly improved over the years – with residents now more likely than they were two years ago to say that they are confident they will achieve dreams in retirement (29% vs. 17%) andvery confident in their financial future (32% vs. 21%).This increase in confidence may have something to do with the fact thatmore Emerald City residents report that they have a financial advisor than their peers in other major U.S. cities (37% vs. 29%).

•Citizens in this northwest city are also thinking about potential financial challenges in the future. Nearly half (45%) say they expect that funding health care expenses in retirement will be a challenging financial issue, though fewer than average (27% vs. 35%) say they are extremely concerned about health care changes due to the Affordable Care Act.

6. San Diego

Preparation ranking: 1

Confidence ranking: 10

2012 ranking (composite): 2

2011 ranking (composite): 3

2010 ranking (composite): 6

•San Diego locals are steadily preparing for retirement, landing them in the top spot on the preparation index and in the top ten on the composite index. About eight in ten (79%)San Diego locals say they have taken at least some steps to prepare financially for retirement, and over half say they have contributed to an employer-sponsored retirement plan (54%), and to their own retirement accounts (59% vs. 48% of all survey respondents).

•Perhaps as a result of theirhigh preparation levels, locals are feeling a bit more confident this year. More than two in five (41%) SoCo dwellers say they feel on track for retirement, still on par with the national average (42%).Three in ten(30%) also say they feel confident about their financial future – representing a steady increase from the 18% who reported this sentiment in 2010.

•People in the San Diego area continue to have a sunny outlook on retirement. More than two-thirds (69%) of residents report that they have positive feelings about retirement – the most in four years. The numbers who report feeling worried about retirement have also drastically diminished; only 16% of San Diego respondents say they feel worried when they think about retirement compared to 26% last year. Perhaps the things they plan to do during retirement are helping drive these sentiments – San Diego locals plan to spend significantly more time in retirement volunteering than their peers across the nation (6 vs. 4 hours per week).

•Locals in this metro are also less likely than the average American to say they feel concerned about health care changes due to the Affordable Care Act. Only 58% report feeling concern about these pending changes compared to 68% nationally.

7. Sacramento-Stockton-Modesto

Preparation ranking: 9

Confidence ranking: 8

2012 ranking (composite): 18

2011 ranking (composite): 2

2010 ranking (composite): 4

•The Sacramento area finds itself in the top 10 on the composite index again and they’re showing strong retirement preparation and confidence levels. The dramatic increase from last year may be largely due to the fact that residents have experienced positive local economic movement – with average home values increasing much more than in other metros across the country.

•Little has changed in Sacramento over the past year but some progress has been made. Over half (54%) report contributing to their personal retirement savings accounts – the most in four years and higher than the national average (48%). Locals are also more likely this year than in past years to say they have a written financial plan (15%), and significantly more likely than the average American to have determined the monthly income they’ll need in retirement (34% vs. 24%).Perhaps this can be attributed in part to the fact that three in ten (28%) also say they have a financial advisor – on par with the national average but the most in four years locally.

•All this planning could be causing Sacramento to be very confident in their retirement plans. More than one in five (22%) say they feel very prepared financially for retirement (the highest in four years) and 35% say they feel very confident in their financial future, compared to just 26% nationally and 23% who reported this sentiment locally last year.

•Not surprisingly, Sacramento respondents are also more likely than the average American to report feeling emotionally positive about retirement (72% vs. 67%). More locals than ever report feeling happy (51%), optimistic (45%) and empowered (23%) when they think about retirement.

•Residents of this metro also report that they are less concerned about the healthcare changes due to the Affordable Care Act than the average American. Only 55% of Sacramento residents say they feel concerned about these changes vs. 68% of all Americans.

8. Baltimore

Preparation ranking: 14

Confidence ranking: 7

2012 ranking (composite): 25

2011 ranking (composite): 21

2010 ranking (composite): 9

•This year marks a comeback for this east coastcity; Baltimore has made up the ground they lost last year and moved 17 spotsup the composite index and back into the top ten for the first time since 2010. The city’s confidence levels helped catapult them to the top, and though they still only fall in the middle of the preparation index, it’s a major improvement from last year when they ranked dead last (#30) on that index.

•Their high preparation levels may have to do with three significant changes taking place in metro over the past year. The first is the fact that significantly more locals than average say they have contributed to an employer-sponsored retirement plan, (60% vs. 51% nationally). Likewise, one in four (24%) residents report that they’ve determined the amount of money needed to save for retirement compared to only 14% who reported having done so last year. And, although still a small percentage, residents are two times more likely to say they have developed a written financial plan this year than last (13% vs. 6%).

•Naturally, along with this preparation comes confidence; more Baltimore residents this year than in years past say they feel on track for retirement (48% vs. 35% in 2011 and 2010) and believe that they will achieve their dreams in retirement (25% vs. 20% in 2012).

•Perhaps this confidence is also leading to positive emotions. Nearly half (45%) of locals report feeling optimistic about retirement compared to only 38% of their peers nationwide.Additionally, nearly one in four (22%) say thinking about retirement makes them feel empowered – compared to only 13% who reported this sentiment last year. Feelings of worry (17%) and anxiety (15%) were the least reported locally in four years.

•But locals are considering potential pitfalls in retirement; nearly half (47%) say they expect that affording health care expenses in the future will be a challenging financial issue, and another 40% believe that knowing how much they can withdraw from their savings without outliving their money will also be a hurdle.