How to Redefine Retirement on Your Own Terms

Retirement is no longer one-size-fits-all. Once defined as the end of a career or turning 65, today’s retirement is as unique as every person who enters it.

Many American workers and retirees are eager to embrace new opportunities in retirement. However, a new report from Park Avenue Securities and Guardian found that financial, physical, and mental wellness challenges often stand in the way.

As Americans’ well-being needs evolve in retirement, so too should the ways in which they prepare. Understanding these shifting dynamics is the first step to defining retirement on your own terms.

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Here’s what to know.

More years, more possibilities

Americans are living longer. Between 1960 and 2015, life expectancy in the US increased by almost 10 years. By 2060, the average lifespan is expected to increase by another six years.

On one hand, an increasing lifespan gives Americans more opportunities to make the most of their retirement years. The study found that 54% of retirees say they are in good financial health, providing them with the financial resources to finally pursue a passion, travel to dream destinations, or spend quality time with family.

Yet, to fund a longer retirement, Guardian and Park Avenue Securities found that 73% of retirees plan to continue working part-time in retirement.

Enjoying a longer retirement also necessitates staying physically healthy. The same Guardian and Park Avenue Securities report found that only 39% of current workers and 40% of retirees rate their physical health as very good or excellent. Overall, 47% of retirees thought they’d be in better health in retirement.

There are also implications for Americans’ mental and emotional wellness. Although the report showed that 60% of retirees say they have good mental health, 34% said they didn’t expect to feel so bored or miss their careers. Additionally, 27% were surprised by how lonely they feel or by how little time they are spending with their family in retirement

Taking charge in retirement

To support well-being in retirement, many retirees and workers are taking a closer look at their planning strategies.

In reflecting on their plans, one in five retirees reported concerns about how they’ve prepared for retirement. With future lifespan anticipated to increase, today’s workers are even more concerned — 40% say they have regrets about how they’ve prepared financially for retirement.

One of the best ways to take charge of your retirement is to work with a financial consultant, as Guardian and Park Avenue Securities’ study found that people who work with a financial consultant are more likely to say they are on track for retirement. Despite this, less than half of retirees (48%) and current workers (40%) have sought guidance from a financial consultant.

How can a financial consultant make a difference and help build your retirement planning confidence? Here are four ways they can partner with you to empower your retirement:

• Account for various retirement scenarios: While the study found that 84% of people expect to retire at a certain age, only 52% ultimately do so. Especially as 39% of retirees reported moving up their retirement age, financial consultants can help you factor in contingencies when developing a retirement income and savings plan.
• Anticipate future mental and physical health needs: Given that nearly half of retirees said they thought they would be healthier than they actually are in retirement, financial consultants can help you account for potential future needs like caregiving support or access to medical care — especially amid rising health care costs.
• Brush up on available financial resources: Many Americans aren’t familiar with key financial products. For example, despite a steep decline in the number of people with access to a pension, 55% of Gen Z expect to use a pension in retirement. At the same time, just 30% of Americans know that an annuity can provide guaranteed income for life — despite this being the top financial concern facing Americans and the fact that annuities are the only product on the private marketplace that offer lifetime income. Financial consultants can help explain how these tools work so that you can generate the most financial value possible.
• Consider alternative income streams: Annuities can help supplement income from Social Security, pensions, and 401(k)s. There are two basic types of annuities: income (sometimes called immediate) and deferred. Factoring in how close you are to retirement can help you pick the right annuity for you. For those who are still a few years away from retirement, a registered index-linked annuity (RILA) can help you reach your financial goals as it offers growth potential for your retirement assets, while providing a level of protection during market downturns. A financial consultant can help you identify if and what annuity might be right for you.

The new retirement reality

The findings are clear: retirement today is more flexible, but also more complex, with longer lifespans impacting all aspects of well-being. Many retirees and workers are optimistic about retirement but need to adjust their preparation and planning strategies.

To redefine retirement on your own terms, a financial consultant can help you plan for a range of scenarios, stay informed about financial options, and assess income sources. Your retirement can be as unique as you are — start shaping it today.