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If you have these personality traits, you could be at increased risk of termination in retirement



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Do you have the personality to retire richly – and stay that way?

Your personality and other traits may have more influence on how quickly you spend retirement savings than factors such as your age, marital status, desire to leave your inheritance, and whether you continue to work during retirement, a study published in the journal Psychology and Aging showed Monday.

Two traits – conscientiousness (for example, you are organized, thorough, diligent and alert) and financial self-efficacy (which is a sense of resilience and control over financial situations) – had the strongest direct connection to the speed at which people withdrew. their retirement savings accounts. People with these traits withdrew much more slowly.

In the meantime, people are more open to new experiences (for example, those who are creative, imaginative, adventurous and curious); more comfortable (for example, those who are nice, caring, warm and helpful); and more neurotic (for example, people who are often nervous, anxious, moody and not calm) are more likely than others to withdraw from their retirement savings.

And people who have experienced a lot of negative emotions in the last month – such as fear, scared, anxious, frustrated, guilty, ashamed, bored, hostile, nervous, sad or in need – have also easily retired at higher rates.

Possible reasons? "Greater neuroticism and negative emotions can result in impulsive financial behavior and poorly timed investment decisions," Sarah Asebedo, study author and professor of financial planning at Texas Tech University, tells MarketWatch about these findings. "Those who are more acceptable are usually warm, kind, friendly and caring and can therefore prioritize giving financial support to others (e.g., friends, family, charities) over keeping money in their accounts."

And she adds, "Research suggests that those with greater openness aspire to less value in material goods and more experience, but also show impulsiveness and less judicious behavior in money management, which can again result in higher withdrawal rates."

The study looked at the personal data of more than 3,600 people in the United States over the age of 50 (average age was 70) and compared them with tax data from the same participants.

Study authors – Asebedo and Christopher Browning, also professors of financial planning at Texas Tech University, warn that a higher withdrawal rate is not always a bad thing. "The higher rate of portfolio withdrawal is worrying if it puts an individual on the path to running out of money early. However, if a higher rate of portfolio withdrawal does not present a risk of losing money, it could make living a good life easier, ”Asebedo said in a statement.

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