A new survey suggests that where you live might influence your readiness to retire and that the Minneapolis-St. Paul metropolitan area scored the highest among the country's 30 largest metropolitan areas.
The study, titled The New Retirement Mindscape 2010 City Pulse index, and sponsored by Ameriprise Financial, examined each city to determine where people were the most prepared for and confident about retirement.
Following Minneapolis-St. Paul, Raleigh-Durham came in second and Nashville third, while Los Angeles ranked last (30) just behind Indianapolis (ranked 29) and Orlando (ranked 28).
Each metropolitan area was scored based on responses to a national survey which measured 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.
More confidence
The biggest similarity between the top-ranked metro areas was that their residents made retirement planning a priority - and not just from a financial perspective. It was a tight race for the top spot, but Minneapolis-St. Paul managed to edge out Raleigh-Durham in part because its residents approached retirement with more confidence, suggesting higher levels of preparation.
Minneapolis-St. Paul scored significantly higher than the national average on nearly every factor related to retirement readiness. It had an impressive 83% of survey respondents who said they have set aside money for retirement, compared to a national average of 69%. This may help explain why nearly half (48%) of Twin Cities residents report feeling "on track for retirement and a third (30%) say they are "very confident in their financial future.
Raleigh-Durham does have a slight edge from one standpoint. In addition to being financially prepared, 80% of people surveyed say they've given a lot of thought to the activities they'd like to pursue during retirement.
A similar trend was seen among Nashville residents, who were among the most likely to have given serious thought to the activities they'd like to pursue during retirement. And while the area shows only average levels of financial preparation, half of those surveyed report that they feel "on track" for retirement.
Economy appears to be significant factor in lowest ranked cities. And if retirement is a priority in the top three metropolitan areas, the opposite could be said for those at the bottom.
Findings suggest that, at least in Los Angeles, more immediate financial concerns may be taking precedence over retirement planning. In L.A., more than a third (36%) of those surveyed say they've experienced a career setback or a layoff in the past 18 months and 22% report that they are currently unemployed but planning to return to work. This may help explain why an astonishing 37% of its residents admit that they haven't given much thought to preparing for retirement - and only 57% have set aside money.
The sentiment is similar in Indianapolis, where a third (31%) of retirees say the economy has impacted their retirement plans, compared to a quarter (25%) of retirees nationwide. Here, just 42% of those surveyed have set aside money into their own savings or investments, and only 60% of people associate emotions like "happiness" and "optimism" with retirement.
Meanwhile, a mere 20% of those surveyed in Orlando say they've determined the income needed in retirement and a full 30% claim they haven't thought much about it. Some residents are deciding to return to work, as is the case for 5% of respondents - a rate more than two times the national average (2%). However, with a local unemployment rate above the national average, finding post-retirement jobs may be challenging.
Preparation and confidence appear misaligned in some major metro areas. For example, in Washington D.C. (which ranked 23rd), 80% of its residents are setting aside money for retirement - second only to top-ranked Minneapolis-St. Paul. However, confidence is lagging dramatically in the nation's capital. Some 40% of those surveyed expressed negative feelings when they thought about retirement, and the metro area ranked second to last on confidence factors.
The story may be clearer in number 12 San Francisco, which ranks fourth for preparation but 18th on confidence. The metro area has not been immune to the recession, which hit California especially hard. While employment figures for those surveyed are on par with the national average, other sources indicate a higher unemployment rate overall. Likewise, 36% of pre-retirees from this area say that they're planning to postpone retirement due to economic factors, which is significantly higher than the national average (26%).
Similar discrepancies are noted in Detroit (ranked 21), Tampa (ranked 19) and St. Louis (ranked 17), however in these metropolitan areas preparation lags significantly behind confidence. Whether people from these areas are overly confident or simply more resilient, it appears their emotions have made a faster recovery than the economy.
As for how all 30 metropolitan areas are ranked, here they are:
1. Minneapolis-St. Paul
2. Raleigh-Durham
3. Nashville
4. Sacramento-Stockton-Modesto
5. Seattle-Tacoma
6. San Diego
7. Hartford-New Haven
8. Denver
9. Baltimore
10. Boston
11. Dallas-Ft. Worth
12. San Francisco-Oakland-San Jose
13. Chicago
14. Houston
15. Atlanta
16. Phoenix
17. St. Louis
18. Pittsburgh
19. Tampa-St. Petersburg
20. Miami-Ft. Lauderdale
21. Detroit
22. Philadelphia
23. Washington D.C.
24. Portland
25. Cleveland-Akron
26. New York
27. Charlotte
28. Orlando-Daytona Beach-Melbourne
29. Indianapolis
30. Los Angeles
