These days, retirement is well… different…than most retirees and retirees-to-be had once imagined it might be. Visions of cruise ships have mostly been replaced by more simple joys and pleasures, like health and wellness.
By the numbers: There’s no brushing under the rug that most Americans don’t feel ready financially to plunge full speed into retirement. In fact, fewer than 1 in 4 Americans report their current retirement lifestyle is what they had planned for, according to a survey of 2,000 retirees from ages 62 to 75 by the Employee Benefit Research Institute (EBRI).
Rather than starting down an adventurous bucket list the day after a big office retirement party, retirees are more commonly trying to live better with less.
Case in point: nearly 6 in 10 of respondents of the survey chose to spend down only a small portion of assets, spend none at all, or grow their assets.
That means that only a very small portion of retirees are enjoying European river cruises with a top-shelf drink in hand.
What’s the disconnect: For one, retirees priorities have changed. 81% of retirees are focused on maintaining their health and wellness as a top priority according to the survey, followed by 68% who cited quality time spent with family and friends. Less than half of respondents reported travel as a top goal.
“We expect retirement is going to be one thing and then when you actually get into retirement, as your priorities have changed, you’re not as excited about doing things that you thought you were going to be excited about,” according to Lori Lucas, president and CEO of EBRI.
She notes that transitioning from a lifetime of saving for retirement to then spending in retirement is a difficult shift for many.
That’s especially true for individuals who find themselves in a forced retirement. According to a separate study by EBRI, nearly half of workers retire before they plan to for reasons including layoffs, health issues, or another unanticipated cause.
How to retire better: Be prepared to retire early, even if you don’t plan on it. Know that once you enter your 60s, it’s possible that you might be forced to retire before you’d like to.
Cultivate a strong sense of identity beyond the office well before retirement. Have interests and hobbies that help you to identify yourself beyond your professional role.
Lastly, consider phasing into retirement by working part-time in your typical capacity or consulting before officially phasing out of the workforce. This is an increasingly common and appealing trajectory for many retirees who want to spend less and stay engaged.
