MetLife Study: Family Structure Shapes Every Aspect of Mid-Lifer’s Retirement Planning, Income and Security

By Joseph R. D’Amore, Chartered Financial Consultant

Can family structure dictate your level of financial comfort in retirement?

A great deal of attention has been paid to the role that gender plays in retirement planning, but family structure is a critical and often overlooked component. A new study from MetLife’s Mature Market Institute shows that family dynamics strongly influence retirement planning for people in mid-life. 

The Family Matters study was developed to determine the degree to which family structure influences how people plan for retirement. It addressed three specific mid-life segments – ‘Traditional Families’ (two parents and children from their current relationship), ‘Blended Families’ (two parents with at least one child from a previous relationship) and ‘Single Women’ (widowed, divorced or never-married women with or without children).

One of the Study’s central findings is that Blended Families and Single Women do not consider themselves prepared for what retirement holds. The majority of Traditional Families (55%) have a clear idea of what they hope to experience and achieve in retirement, compared with only 38% of Single Women and 48% of Blended Families. Similarly, nearly seven out of ten (66%) of Traditional Families feel at least somewhat prepared for retirement, compared to only 56% of Blended Families and 40% of Single Women.

Blended Families and Single Women also believe that their families face unique challenges when it comes to retirement planning specifically because of their family situation. Nearly two-thirds (62%) of Single Women and Blended Families (61%) think that it’s significantly more difficult for them to save for retirement than it is for their friends who have different family situations.

Roughly one in five Blended Families and Single Women (19% and 18%, respectively) are concerned that they don’t have safeguards to ensure that an ex-spouse will not lay claim to their income or savings meant for themselves or their children. This sentiment is even higher among those that have experienced a divorce in the past five years. These recently-divorced respondents are also more concerned than their peers about having sufficient separate funds earmarked for their children’s inheritance.

Single Women are more worried than their peers (38% vs. 27% of Blended Families and 23% of Traditional Families) that they will not have a set level of monthly income that lasts throughout their retirement.

Many single female respondents, for instance, share the sentiment, “Because I am a widow, I do not have the buffer of a second income; it all falls on me.”  A large number of Single Women respondents believe that the retirement savings imperative is higher for them than it is for those who are married. Despite this, Single Women are actually much less likely to own many common traditional savings or income products.

The study also shows that some retirement issues transcend family structure. Healthcare is a critical issue for all.  Roughly two-thirds (63%) of Traditional Families do not expect to have enough money to cover healthcare costs in retirement, as is the case with 69% of Single Women and 66% of Blended Families.

Of the entire group surveyed, almost half (47%) identify a need for more savings and assets; 29% would like a better gauge of both their routine and unpredictable retirement expenses. 

Retirement income and healthcare are two universal concerns for pre-retirees. The challenge for those in middle age is to make the unpredictable elements in their lives – the current and future needs of their children, the assets or income that go to an ex-spouse, their own healthcare and other costs – more manageable.  More security with regard to income and assets would be of great help to them as they transition into retirement.

Complex family structures add an extra level of unpredictability to retirement planning, and today’s middle-aged Americans are seeking ways to make their income last a lifetime and tools to support their goals.  They are looking for professional planning and financial products for “families like theirs,” not just generic advice.

For additional information on the tools MetLife can provide to ensure that retirees from every kind of family structure can safeguard their retirement savings, or to view more on the MetLife Family Matters Study, please visit www.metlife.com or contact Joseph R. D’Amore, ChFC @ MetLife  222 Rosewood Drive, Danvers, MA  01923

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