Baby boomers and Gen X are reimagining retirement, according to a new study.
Pre-retirees and retirees view their parents’ version of retirement as having been a time for “rest and relaxation,” according to a new study “Longevity and the New Journey of Retirement” conducted by Edward Jones in partnership with Age Wave.
However, when asked about their own retirement today and in the years ahead, only 27% see today’s retirement in the same light, while 55% define it as “a new chapter in life.”
“This is definitely not their parents’ or grandparents’ retirement,” according to Ken Cella, principal, branch development at Edward Jones. “At the same time, they face new challenges, especially around their health, their finances and finding a new definition of purpose.”
The survey of more than 11,000 people was conducted online by Harris Poll in January and February 2022 and consisted of adults aged 45+ who are retired or within 10 years of retirement.
Retirement for their parents “was like an extended vacation,” Mona Mahajan, Edward Jones senior investment strategist, told Yahoo Money. “But interestingly, when you ask them to describe their own retirement, most of our respondents said that they view their retirement as a whole new chapter in life. It's a time to explore new possibilities and live their best life.”
In fact, nearly three-quarters of those surveyed said they are able to realize their hopes and dreams in “this new less-pressured stage of their lives,” Mahajan said.
When retirement kicks off is also a matter of perspective.
The top milestones that pre-retirees and retirees view as the “start” of this chapter include stopping full-time work (34%), receiving Social Security and/or a pension (22%), leaving one’s job/career (17%), and achieving financial independence (17%). Only 10% said the start of retirement meant reaching a certain age.
Work in retirement is now part of the new longevity equation. Almost 3 in 5 surveyed want to work in some way during their retirement, with 22% looking to work part time, 19% hoping to cycle between work and leisure, and 18% wishing to work full time.
And that’s a good thing. Despite Americans’ worries about health care and long-term care costs in retirement, they still desire to live longer, and nearly seven in 10 Americans now say they want to live to age 100.
In full disclosure, I was invited to virtually moderate a press meeting with Ken Dychtwald, psychologist, gerontologist and founder and chief executive of Age Wave and Mona Mahajan, as they shared some of the findings from the landmark research.
Afterwards Dychtwald offered additional insights into the report’s findings and the changing world of retirement in a conversation with Yahoo Money. Here are the highlights:
What do you think were the most compelling results of the new study?
There were a few that really kind of caused me to really stop and think hard. People who are rolling into retirement today do not view it as just a wind down, or an extended vacation, or kind of the beginning of the end.
They've got this notion that they're embarking on a whole new chapter in their lives and perhaps they're being excessively optimistic, but the majority of people think this could be the best period of their lives. In our ageist culture it’s hard to imagine that maturity could be that desirable, but it appears to be how people are now envisioning what’s ahead.
What we saw is this enthusiasm, this feeling that “I've got decades in front of me, I'm feeling pretty good. I've got some emotional intelligence. Wow, this is not like it was for my parents or grandparents.”
Although most are worried about how unpredictable health or money or the markets are, there's a lot of excitement, a lot of eagerness to get on with their new retirement journey. So that's number one.
Number two was the realization that the current discussion about retirement is very Neanderthal. Historically it's been like retirement is a light switch. You're not retired, then you are retired.
In our study, the second thing that I most appreciated was we saw the evolution of the new retirement journey beginning a decade before retirement. You're not yet retired, but you're starting to think about it. You're wanting some help in terms of “where should I live and am I going to make new friends and who am I going to be? How will I define myself? And where do I turn for guidance, or help, or counsel, or role models, or options in the years ahead?”
There's a lot of confusion and disorientation and a lot of desire for guidance. And I don't mean just financial guidance. “Should I be training for a new career? Do I have enough money? Do I like who I am? How will I best make new friends and where can I volunteer in a way that suits my skills and interests?”
What role does work play in retirement?
In the 20th century, this notion came into being that you should stop working at 65 and retirement was kind of a reward. After studying retirees for 48 years, I believe that in this new era of enhanced longevity, the idea that you should stop working at 65 is both impractical and not necessarily good for the soul.
I surely can see the rationale to have a little bit of time to rest, recharge, and enjoy your family, do some things you always wish you had time for. But if you're going to live to 90, you know, honestly, unless you're Bill Gates or Elon Musk, you can't afford to stop working when you're 65.
I don't think that's such a bad thing. Our new Edward Jones study shows that 59% of pre-retirees say they intend to work in their retirement. But if you ask them, do they want to work full time? Almost nobody says they do. They'd like to work three days a week, or maybe eight months a year, or maybe learn to do something different.
We have to remove this belief that everyone should stop working at 65 for three reasons. Number one, we can't afford to. The second reason is that I think it's good for us to work a bit. And I don't mean it has to be hard work. But so much of the work today is not physical labor. And the third reason is that I think it keeps us modern and keeps us socially connected with people of all ages.
Older people can be out of touch and that's not good for anyone. Some continued work can help people to remain both useful and youthful. And I think that would be good for everyone.
What does purpose play into a successful retirement?
From the new study, 77% of retirees feel a responsibility to help future generations. And the number was even higher among newly retired (83%). They felt that they had a responsibility to deploy some portion of who they were in their life to help future generations. And that's a bridge that's been missing. A lot of boomers are trying to find ways to give back and to make an impact. So it's not just to give something, but to make an impact that they can see and feel.
Kerry is a Senior Columnist and Senior Reporter at Yahoo Money. Follow her on Twitter @kerryhannon