Time travel for retirement

Tom Foster

By Tom Foster
E. Thomas Foster Jr. is head of strategic relationships for retirement plans for MassMutual.
Posted on May 9, 2018

Imagine for a moment that you could travel back in time. Would you take the opportunity to meet Leonardo da Vinci or William Shakespeare? Perhaps you’d attend the signing of the Declaration of Independence or soar on the first motorized flight at Kitty Hawk. Would you do anything differently in your own life?

Recently, MassMutual asked retirees and pre-retirees about whether they would change anything in preparing for retirement if they could go back in time. We wanted to know if there were any lessons that retirees could hand down about their preparations for life after work.

When polled about their retirement savings, many retirees and pre-retirees say they would change their saving habits or how they managed their retirement savings if they could go back to the past. Some may have wanted to invest in a fledging tech stock, play a specific lottery number or wager on a race horse, too, but those questions are for another day.

What more than half of retirees (55 percent) and three in four pre-retirees (74 percent) report is that they wish they had started saving earlier, according to the MassMutual Retirement Savings Risk Study.1 Some had more regrets than others, especially those with less than $250,000 in assets or respondents who took a loan, withdrawal or suspended saving in their employer’s retirement plan.

Surprisingly, the study finds that a majority (58 percent) of retirees wouldn’t change how they invested just before retirement. The rest would definitely make changes if they could dial back the clock.

Most of the respondents who would go back in time to make changes would become more aggressive and take more risk with their savings. Thirty-five percent say they would have invested “much more” or “somewhat more” aggressively. Only 7 percent indicate they would be more conservative.

Retirees with a high risk tolerance (61 percent) are more likely to maintain they would not alter their pre-retirement investment strategy compared to others with a relatively low tolerance for risk (51 percent). Those who refrained from taking a loan or withdrawal or suspending contributions to their employer’s retirement plan were also less likely to want to go back in time and make changes in their investment strategy compared to those who did engage in such behaviors.

The wistful thoughts about investing more aggressively may have been colored by one of the longest bull markets on record. Whatever the reason, it’s a finding that advisors need to discuss with clients to determine if they truly understand how much risk they’re taking and whether their investments are allocated based on their actual risk tolerance and time horizon.

There’s no doubt that many retirees and pre-retirees are looking for help. Seven in 10 retirees report they work with an advisor compared to six in 10 pre-retirees, according to the study. Another 35 percent of pre-retirees say they plan to work with an advisor in the future. It may be good news for advisors.

Even better: when retirees were asked about what advice they would pass on to pre-retirees about how best to invest their money, the No. 1 response was to use a financial advisor.

The exercise in time travel uncovered some thought-provoking findings about the relative risk and rewards of investing as seen through the eyes of retirees and pre-retirees. Advisors should use the information to help ensure their clients’ time -- as well as their assets -- are wisely allocated. Because we still haven’t devised a way to go back and change the past.


E. Thomas Foster Jr. is head of strategic relationships for retirement plans at MassMutual.

MassMutual, "MassMutual Retirement Savings Study," March 2018. 

 The internet-based study was conducted on behalf of MassMutual by Greenwald & Associates and polled 801 retirees who have been retired for no more than 15 years and 804 pre-retirees within 15 years of retirement. Pre-retirees were required to have household incomes of at least $40,000 and retired respondents had at least $100,000 in investable assets and participated in making household financial decisions. The research was conducted January 2018.