The reality of retirement planning is that things are always changing and each passing generation faces a new set of challenges as they prepare for their future.
But you don’t even have to go back that far. Things are much different now than even a decade ago and we’re working with clients to make them aware of these new realities and ensure that they’re thinking about each factor when building a plan.
If you’re approaching retirement or know someone who is, then take a few minutes to read through some of the more significant differences you need to know about.
People are living longer.
Go back just 90 years ago and the average life expectancy was 60 for a man and 64 for a woman. Today, once you reach those ages you can expect to live another 20-25 years. Statistics tell us that one in four of us will live to the age of 90.
And because people are living much longer, they’re also working later in life than they used to. So don’t feel like you have to retire at a certain age just because your parents did. And make sure your plan is built to last as long as you will.
Retirement is now a very active stage of life.
For the longest time, retirement conjured up thoughts of shuffleboard and sipping tea on the front porch in a rocking chair. But that’s no longer the dream retirement for most people.
Instead, retirement today usually involves spending time volunteering for a worthy cause, traveling domestically or internationally, chasing a passion, or helping raise grandchildren. And while being active is more fun, it can also be more expensive, so it’s important to have a realistic income plan for your ideal retirement.
Fewer people are quitting work cold turkey.
Throughout the years, it was very common for people to have a retirement day and walk away from a paycheck for good once that day arrived, but many people are finding ways to combine work and leisure now. Some are shifting from part-time work to full-time work. Others are shifting to a role that’s less demanding in the same company.
Then there’s another group of people that find an encore career by moving to a new company or starting in a new industry altogether. There are plenty of ways to stay connected so don’t feel like your work life has to be an all-or-nothing proposition.
The current investing environment for retirees is more challenging than it used to be.
The last reality on the list is one that won’t come as a surprise to most people. The stock market is more volatile than it’s ever been. Interest rates are still very low. And retirees today rely more on their retirement accounts than generations before them.
If you’re retired or close to retirement, this isn’t the best time in history to be investing without a plan or without a good advisor.
It’s never too late to build a plan to address these realities and the other financial considerations that impact your financial future.