Retirement Mindset Matters

Methodology Appendix

Optimism

Syntoniq assessed an individual’s optimism by comparing the following:

An individual’s reported confidence in meeting their retirement savings goals versus the amount of retirement savings concerns they had.

Whether an individual expected a delay in retirement due to competing financial priorities versus their average impact rating of competing financial priorities. 

An individual’s guess of the number of financial literacy questions they thought they answered correctly versus the actual number of questions they answered correctly. 

Future Orientation

In order to assess Future Orientation, Syntoniq calculated an average score from respondents’ answers from the following questions:

Whether an individual is willing to sacrifice their immediate happiness or well-being in order to achieve future outcomes.

How an individual would best describe their financial saving or spending personality.  

Whether an individual often thinks what their life would be like 10 years from now.

While items 1 and 3 used scaled answers, item 2 was based on the selected number of characteristics indicating long-term versus short-term financial perspectives (e.g., saving versus spending).1

 Risk-Return Focus

 Risk-Return Focus is measured by the following scaled items: 

 Whether an individual generally focuses on preventing mistakes and avoiding failure versus whether the individual strives to achieve success and pursue goals.

 Whether an individual finds growth and fulfillment or stability and security more important.

Whether when it comes to trying out new things, an individual often finds themself focusing on losses or gains.

Financial Literacy

Financial literacy was measured by an individual’s number of correct responses to five multiple-choice questions. 

Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow? 

Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account? 

If interest rates rise, what will typically happen to bond prices? 

A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage, but the total interest paid over the life of the loan will be less. 

Buying a single company’s stock usually provides a safer return than a stock mutual fund (i.e., portfolio of stocks). 

Disclosures

Baby Boomers refers to people born between 1946 and 1964. Generation X refers to people born between 1965 and 1980. Millennials refers to people born between 1981 and 1996.  Generation Z refers to people born between 1997 and 2012. 

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THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO.

All investing involves risk.

Views expressed discussed are those of survey respondents, compiled by Goldman Sachs Asset Management as of June 2023 – July 2023.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. 

Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources. 

Diversification does not protect an investor from market risk and does not ensure a profit.

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