It’s time to rethink the concept of retirement, as we know it.
Certainly much of the coming changes revolve around the effect of 76 million Baby Boomers marching into retirement – or already there. Yet this is a very different generation of retirees, and as a result, their retirement is likely to be anything but traditional. While Baby Boomers have always beat to a different drum, add in the changes in life span, work, and just the overall nature of American life today, and it’s inevitable the concept of retirement is also being forever redefined.
Let’s start with the age factor. Pre-determining a time to retire strictly based on age alone – just a number – is no longer a reality for most people. Sure, it’s a target of sorts, but retirement age and actual retirement itself, are two different issues today. The original retirement age of 65 was actually established in the late 1800s, Bismarck formula, when life expectancy was 47. But with life expectancy pushing 80 today, is it still realistic to retire at 65? If we were to use that same Bismarck formula now, we’d be retiring people at 120! The real reality check today is that many of us may already feel like we’ll have to live to 120 just to retire at all!
So on that note, let’s talk about the work factor. There are many different schools of thought on the whole concept of work, particularly later in life or in ‘retirement’. While it may sound like a strange concept to put the words work and retirement in the same sentence, it’s clearly where many already are – and where others are headed. In fact, more people age 65+ are working than at any time since the turn of the century, according to 2016 Pew Research Center analysis. And for good reason, The American Academy of Actuaries Public Interest committee states that the average retiree today lives about 40 percent longer than a retiree did in 1940. So it should come as no surprise that more retirees are working – and for a variety of different reasons. Some work full time, others only part time, some work because they need the income to cover the rising expenses in retirement, such as health care and long-term care — yet others work longer because they want to and enjoy the social interaction or they want to continue to feel like a productive member of society. And then there are others who work longer out of both need and want.
I truly believe work later in life is a good thing – especially if we can redefine it as something meaningful and balanced within our lives and this new retirement lifestyle. Staying engaged by working and/or volunteering can make the difference between living and existing for many. Yet ultimately, work is just one example of the longevity revolution’s effect on the way we’ll live and look at life in retirement.
It’s impossible to discuss this issue of redefining retirement without addressing the role of the improvement in health and vitality living longer now encompasses. The fact that people are spending more time in retirement – upwards of one-third of their life, in some cases, which may equate to 20-30 years, this in itself changes the concept of retirement from the continuous vacation mindset to a new phase of life that now can involve meaningful work, flexible schedules, leisure, family, volunteering – all in a state of healthy balance. As a result, the real question now is not what we’re retiring from, but what we’re retiring to.
All of this is a major change in mindset for most people – and one that definitely requires some education and enlightenment about this new retirement/longevity revolution we’re experiencing for the first time ever in our society. There is no road map here for us to follow, yet while we’ve seen some indicators of this new retirement lifestyle among today’s retirees, the Boomers, Millennials and future generations will undoubtedly be taking it a step further – not only reinventing themselves, but likely the entire retirement landscape as well.
It’s definitely time to rethink retirement.